Section 372
This query is : Resolved
Megha Shah
(Querist)
24 February 2010
1) Our company wants to provide Loan to a group Co (which is a broking company). The Group Co (broking company) has a stake in our company (between 35% - 40%). Can our company provide a loan and what are the restrictions.
2) Section 372A also says that the sub sec(s) (1) and (2) doesnt apply to any loan made by an holding company to its wholly owned subsidiary. But can a wholly owned subsidiary provide a loan to its holding co ???
2) Section 372A also says that the sub sec(s) (1) and (2) doesnt apply to any loan made by an holding company to its wholly owned subsidiary. But can a wholly owned subsidiary provide a loan to its holding co ???
Aditya Maheshwari
(Expert)
24 February 2010
If your company which is giving loan is a private limited company then there no restrictions in giving loan.
If public limited company is givin loan to its non susidiary then loan can be given upto 60% of its reserves & surplus or 100% of its reserves whiehever is higher.
The loan can be given in excess of the limits provided a resolution is passed in an general meeting of the members sanctioning specific limits for givin loan
If public limited company is givin loan to its non susidiary then loan can be given upto 60% of its reserves & surplus or 100% of its reserves whiehever is higher.
The loan can be given in excess of the limits provided a resolution is passed in an general meeting of the members sanctioning specific limits for givin loan
Aditya Maheshwari
(Expert)
24 February 2010
Also if the company giving loan is a public limited company and loan is given to a private limited company then there are some restrictions in section 295 also i. e. the director of the lending company should not be either a director or shareholder of the borrowing company.
Megha Shah
(Querist)
25 February 2010
Thanks Aditya.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax on Amount transferred in HUF Account
- WRONG GSTR7 ENTRIES ACCEPTED ERRONEOUSLY
- GST input credit on commercial property
- Nursery business
- GSTR-9C filing
- GST REFUND ISSUE ON PURCHASE OF PLANT AND MACHINERY
- TDS on Dashcam rent and allied services
- Working on Gold wastage during Melting of old gold jewellery
- Import Order Cancelled.
- Royalty payments to the Mining Department for procurement of murum - GST input
- Subject: Legal Remedy for Removal of Income Tax Demand for AY 2024–25 – Charitable Trust
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
