Section 372a
This query is : Resolved
19 August 2013
Whether section 372A is applicable to NBFC's?
19 August 2013
thanx for quick reply.........but can u explain section 372a...........
19 August 2013
You are welcome Sonia…
372 A relates to Intercorporate loans and Investments. It basically says, that a company can give loan or advance to another company to the maximum of 100% of its free reserves or 60% of Paid up Capital plus free reserves, whichever is higher.
If the company wants to go beyond this limit, it has to pass a special resolution in a General Meeting
372A does not apply to following
1. Loan / Guarantee / Security / Investment made / given by:
A Bank, Insurance Company in ordinary course of business, Housing Finance Company,
A Company established with the object of financing industrial enterprises or providing
infrastructural facilities,
A Company whose principal business is the acquisition of shares, stock, debentures or
other securities,
A Private Company, unless it is a Subsidiary of a Public Company.
2. Investment made in shares allotted u/s 81(1)(a), i.e. Rights Shares,
3. Loan made by a Holding Company to its wholly – owned Subsidiary,
4. Guarantee given or security provided by a Holding Company, in respect of loan made to its
wholly – owned Subsidiary, or
5. Acquisition by a Holding Company by way of subscription, purchases or otherwise, the
securities of its wholly – owned Subsidiary.
Hope it is clear…if you have any doubts…feel free to ask
372 A relates to Intercorporate loans and Investments. It basically says, that a company can give loan or advance to another company to the maximum of 100% of its free reserves or 60% of Paid up Capital plus free reserves, whichever is higher.
If the company wants to go beyond this limit, it has to pass a special resolution in a General Meeting
372A does not apply to following
1. Loan / Guarantee / Security / Investment made / given by:
A Bank, Insurance Company in ordinary course of business, Housing Finance Company,
A Company established with the object of financing industrial enterprises or providing
infrastructural facilities,
A Company whose principal business is the acquisition of shares, stock, debentures or
other securities,
A Private Company, unless it is a Subsidiary of a Public Company.
2. Investment made in shares allotted u/s 81(1)(a), i.e. Rights Shares,
3. Loan made by a Holding Company to its wholly – owned Subsidiary,
4. Guarantee given or security provided by a Holding Company, in respect of loan made to its
wholly – owned Subsidiary, or
5. Acquisition by a Holding Company by way of subscription, purchases or otherwise, the
securities of its wholly – owned Subsidiary.
Hope it is clear…if you have any doubts…feel free to ask
19 August 2013
as you replied that it is not applicable to NBFC.....it is nowhere written in the section......is it your opinion or is it written somewhere?
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
- ITR 2 Short Term gain & Long term gain
- Reporting Income under Section 44ADA
- Itr 1 processing
- Off Market debit and credit transaction
- Building and other construction workers welfare cess act 1996
- ITR validation error - Balance sheet is not filled
- ITR 1: Details for showing Exempt Income
- INCOME TAX ON REDEVELOPEMENT OF FLAT
- Short Term Capital gain on shares bought and sold after 2018 onwards
- ITR returnFY25-26
- LIC Annuity received under Jeevan Akshay Scheme
- In Exports Sales HSN details where to fill
- Form 10BD Filling
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- Difference in tax comparison report
- Gst invoice numbering and delivery challan numbering
- Sales amount in Gstr1
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
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
