Intercorporate loan

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 September 2013 Sir Please tell me whether a private co can give loan to any other private co and the same co don't have any common director

Ajay Mishra

Ajay Mishra (Expert)

24 September 2013 Yes you can made investment.

Non-applicability of section 372A
Sub section (8) of section 372A provides that the conditions of section 372A shall not apply in the following situations and the transactions of making of loans or investments, giving of guarantee and providing security which are outside the provisions of section 372A of the Act are as under:—
(a) to any loan made, any guarantee given, or any security provided, or any investment made by:
(i) a banking company, or an insurance company, or a housing finance company in the ordinary course of its business, or a company established with the object of financing industrial enterprises, or of providing infrastructure facilities;
(ii) a company whose principal business is the acquisition of shares, stocks, debenture or other securities;
(iii) a private company unless it is a subsidiary of a public company.
(b) to investment made in shares allotted in pursuance of clause (a) of sub-section (1) of section 81 of the Companies Act, 1956;
(c) to any loan made by a holding company to its wholly owned subsidiary;
(d) to any guarantee given or security provided by a holding company in respect of a loan made to its wholly-owned subsidiary;
(e) to acquisition by a holding company, by way of subscription, purchase or otherwise, the securities of its wholly owned subsidiary.

Querist : Anonymous

Querist : Anonymous (Querist)

24 September 2013 thanks sir

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