Inter Company Loan - Central Govt Approval

Save Share

This query is : Resolved

Jayesh Jagetiya (Querist)

17 June 2009 Dear Friends,
We are working in a company which has Group of Companies.
We have more than Ten Public & Pvt Limited Companies, Firms, and Proprietorship Concerns. In Companies some Directors are common, in firms the same persons are Partners & in Proprietorship concerns they are proprietor.

These all concerns have transactions in between themselves (Purchase / Sale / Loan).
Whenever we open any new concern it takes loan from Old concerns.

My question is whether we have to take Central Govt approval for the same?

Ankur Garg

Ankur Garg (Expert)

17 June 2009 Hello Jayesh,

In case of inter corporate loan u/s 372A no CG approval required in any situation
but u have to fulfill other requirement of the above section like unanimous Board approval and in certain cases prior shareholders approval.

But CG's approval is required u/s 297 for sale purchase supply of goods material services and if ur paid up capital is not less then Rs 1 crore.

I would suggest go through the following sections of companies act, 1956 deeply:

295, 372A, 297, 299, 300.

Regards

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now