inter company loan ?

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Vijay Parmar (Querist)
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21 May 2016 we have two company .. both company have same management .. can i take money from other company as a loan or temporary finance ?

Jatin Bajaj

Jatin Bajaj (Expert)
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23 May 2016 According to section 186(2), Company can give loan to other Company or body Corporate not exceeding 60% of its Paid up Share capital+ Free Reserves+ Securities Premium or 100% of its Free Reserves+ securities Premium, whichever is more.
But if Company gives the loan exceeding the limits mentioned under sub section 2 , Prior approval by means of Special Resolution passed in General Meeting is necessary.