Mortgage equity share by a company
This query is : Resolved
amit trivedi
(Querist)
12 July 2012
Can a Company (Pvt. Ltd or Public Ltd.) take a loan by mortgage its Equity share Capital?
Please give me detailed answer.
Thanking you
Please give me detailed answer.
Thanking you
Hitendra Jain
(Expert)
12 July 2012
Equity share capital is liability and not asset.
share capital not issued / subscribed / paid up has no existence
Shares are held by shareholders as investments.
they can provide guarantee and for that guarantee pledge /mortgage the shares as security for the loan taken by the company.
company can mortgage its assets only and not other's assets.
it can issue shares (authorized but not subscribed) to the financer as security for the loan but can not mortgage.
share capital not issued / subscribed / paid up has no existence
Shares are held by shareholders as investments.
they can provide guarantee and for that guarantee pledge /mortgage the shares as security for the loan taken by the company.
company can mortgage its assets only and not other's assets.
it can issue shares (authorized but not subscribed) to the financer as security for the loan but can not mortgage.
amit trivedi
(Querist)
13 July 2012
Means Shareholders can give guarantee for pledge/ mortgage their shares on behalf of the company for the loan taken by the company? under which section and any agreement or resolution of BOard or General meeting?
Ajay Mishra
(Expert)
13 July 2012
Hi
Section 125(4)(e) give exemption to create a charge on pledge of movable property (shares) of the company.
Section 125(4)(e) give exemption to create a charge on pledge of movable property (shares) of the company.
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