Loan taken by subsidiary co.

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Sneha (Querist)
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07 July 2010 Hello,

Please help .

X Ltd is the 100% holding co. of Y Ltd. Y ltd. acquires a loan from bank for which X gives a guarantee by pledging Y's shares.

Does this call for creation of charge? If so, who shall file form 8?

Thanks in advance.

Ankur Garg

Ankur Garg (Expert)
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07 July 2010 Hi,

First understand charge is required to be filed by the company u/s 134(1).
In your case there is no need to file any charge because you transaction is not falling u/s 125(4)(e) because in the pledge of shares ----original share certificate is handed over to the lender.

Pledge where property in possession is given away to the lender is outside the preview of section 125(4)(e).

Kindly check section 125(4).

Thanks

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