loan to private company
This query is : Resolved
10 November 2010
Can one private company give loan to other private company...i know 372A is applicable to only to the public company..
kindly suggest
kindly suggest
10 November 2010
Yes, it can .372 A will be applicable if it is a subsidiary of a public company otherwise not.
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10 November 2010
According to me it is very much possible provided this kind of activity is not a regular one.
However the same should be supported by a detailed board resolution with all terms and conditions.
Wait for other opinions.
Regards
However the same should be supported by a detailed board resolution with all terms and conditions.
Wait for other opinions.
Regards
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10 November 2010
It can be done and should be supported via board resolution u/s 292
10 November 2010
Thank you all for kind reply. Further to my query, pd up capital of borrowing co. is 90 lacs and co. wants to take loan of Rs. 1 Cr. As I told, both are Private Ltd. and Director of both companies are same. So In this case apart from Board resolution, is there any other thing require to check.
10 November 2010
No. Provisions of section 293(1)(d) for taking loan does not apply to private company exceeding the paid up capital & reserves.
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10 November 2010
Agree with Expert Aditya. There is no prob if loan amt exceeds the aggregate of paid up capital and free reserve as section 293 is not applicable to a private company.
But be careful about the debt-equity ratio and liquidity. Rest is fine.
Regards
But be careful about the debt-equity ratio and liquidity. Rest is fine.
Regards
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