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Company Law Query

Hitesh Makhija (Student) (37 Points)

19 January 2011

Hi friends,

Please help me solve my query..

If a company gives guarantee to someone, does it have to report it to ROC??

Tel me from angle of both Pvt/Public Co.

Thanks

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15 Replies

Jaideep (Service) (1368 Points)
Replied 19 January 2011

Hi Hitesh,

If I am understanding you correctly, you are talking about creation of Charge. So, for the both private and public companies, no need to intimate ROC.

Regards

Jayashree S Iyer (Company Secretary) (3224 Points)
Replied 20 January 2011

Giving guarantee does not amount to creation of charge.

For giving guarantee no form need to be filed with ROC.

Sudhir Garg (Service) (236 Points)
Replied 20 January 2011

Dear Hitesh

So far as company is not creating any charge / security on its properties / assets, no need to intimate ROC.

Regards- Sudhir

Kalpesh Chauhan, (Tax Assistant (Accounting Technician CA) (8311 Points)
Replied 20 January 2011

Originally posted by : Jaideep
	Hi Hitesh, If I am understanding you correctly, you are talking about creation of Charge. So, for the both private and public companies, no need to intimate ROC. Regards

MD.Taufique (CA,CS) (308 Points)
Replied 20 January 2011

No need to intimate to RoC for both the companies.Corporate guarantee involves BR and SR(only if intercorporate loans and guarantee existing along with proposed guarantee exceeds higher of the following two limits:

100% of Free Reserves

60% of paid up capital and free reserves.)

And my friends creation of charge does not amount to guarantee it is a security for payment of a loan whereas guarantee is an obligation in which company taking the guarantee is obliged to pay for the loan taken by other individual or a company in case of their default.

Sudhir Garg (Service) (236 Points)
Replied 20 January 2011

Dear Ansari

I point to add that providing of corporate guarantee may involve creation of charges / security over assets. Therefore, it is always advisable to clarify the things first. Hope you agree.

regards- Sudhir

Jagdish Trivedi (Practicing CA) (41 Points)
Replied 20 January 2011

Hi Dear,

Giving/providing any guarantee does not amount to creation of charge.

Further, if giving guarantee does not exceed the limit prescribed u/s.372A of the companies act, then there is no requirement to intimate ROC (For Public Co.).

On contrarary, if it exceeds the limit specified u/s.372A, then special resolution has to passed at GM and it has to be intimated to ROC with E-Form 23, within 30 days from cmpletion of GM. (for public co).

So far as pvt. co. is concerned which is not a subsidiary of public co. then it is not at all required to intimate to ROC.

Vedanti Murudkar (C.S Trainee) (21 Points)
Replied 21 January 2011

I Completely agree you Mr Ansari. A Company giving guarantee has to comply with Section 372A, if it is exceeding its limit provided in the respective Section

Hitesh Makhija (Student) (37 Points)
Replied 21 January 2011

thanks a lot to all..

WINNER........ :-) (CHARTERED ACCOUNTANT) (46 Points)
Replied 29 January 2011

i need company law notes .......

WINNER........ :-) (CHARTERED ACCOUNTANT) (46 Points)
Replied 29 January 2011

i need company law notes .......

KRUSHIL GANDHI (STUDY) (21 Points)
Replied 07 September 2013

i had query regarding appointment of first auditor in case of pvt ltd companies that the company had incorporated on 03/02/2012 and the company had not appointed any auditor and now they want to appoint in the month of September 2013 what are the complications for the year ended 31/03/2012 and what about current year 31/03/2013 plz reply me