Applicability of section 372a

HI

   YES YOUR COMPANY NOT REQUIRE TO PASS SPECIAL RESOLUTION. AS PER THE EXEMPTION OF THIS SECTION.

THANK YOU

But here our doubt is we have given Loan and the exemption given is to securities Company dealing in securities in the ordinary course of its business, and we have not provided loan in the ordinary course of business.

FOR WHICH PURPOSE YOUR COMPANY GIVES LOAN TO THAT COMPANY

its just an unsecured loan from one company to another. No specific categorization

In the ordinary course of business in only for banking or housing or finance companies not for securities Company... So if the plain meaning is considered then u can say its exempt.

However if we see the intent of the section then it seems that the exemption is for investment by a securities company in shares and not for loans given to other companies. So in my opinion, you must pass a s pecial resolution.

SORRY FOR LAST REPLY OF STATING THAT YOU ARE NOT REQUIRE TO PASS RESOLUTION. READ FOLLOWING FOR GETTING SOME CLUE TO YOUR QUETION

no investment or loan shall be made or guarantee shall be given or security shall be provided unless previously authorised by a special resolution passed in a general meeting but

the Board may give guarantee, without being previously authorised by a special resolution, if,

a resolution is passed in the meeting of the Board authorising to give guarantee in accordance with the provisions of this section ;

 there exists exceptional circumstances which prevent the company from obtaining previous authorisation by a special resolution passed in a general meeting for giving a guarantee ; and

 the resolution of the Board under clause ( is confirmed within twelve months, in a general meeting of the company or the annual general meeting held immediately after passing of the Board's resolution, whichever is earlier :

Provided also that the notice of such resolution shall indicate clearly the specific limits, the particulars of the body corporate in which the investment is proposed to be made or loan or security or guarantee to be given, the purpose of  the investment, loan or security or guarantee, specific sources of funding and such other details.

(2) No loan or investment shall be made or guarantee or security given by the company unless the resolution sanctioning it is passed at a meeting of the Board with the consent of all the directors present at the meeting and the prior approval of the public financial institution referred to in section 4A, where any term loan is subsisting, is obtain

so you are require to full fill these condition. unless there are penal provision applicable for your case

thank you

Mr. Imam kindly read subsection 8

HERE TWO SECTION WILL OPERATE SECTION 292 AND SECTION 372A

BR IS REQUIRED U/S 292

SR IS REQUIRED U/S 372A if and only if the loan exceeds the prescribed limit.However loan in the ordinary course of business only comes to finance companies banking companies or finance companies u/s 4A OF CA,1956.....