Explanation

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Ajay Kumar Maggidi

Manager - Finance & Accounts

2178 Points Posted on 15 January 2015

Dear Members.

I am unable to understand the following .Please explain following provisions with an example for each

This Section(187(2)) does not prevent a company:

(a) from depositing with a bank, being a banker of the company, any shares or securities for the collection any dividend or interest payable thereon; or

(b) from depositing with, or transferring to, or holding in the name of a scheduled bank, being a bankers of the company, shares or securities, in order to facilitate the transfer thereof;

(c) from depositing with or transferring to any shares or securities by way of security for the repayment of any loan advanced to the company or the performance of any obligation undertaken by it;

(d) from holding investments in the name of depository when such investments are in the form of securities held by the company as a beneficial owner.

Thanks In Advance

Replies (2)

CA CS Sweta Solanki

CA CS

167 Points Posted on 16 January 2015

Section 187 of the Act requires companies to hold ‘investments’ in its own name. I

n this regard Section 187 (1) of the Act reads as below:

‘All investments made or held by a company in any property, security or other asset shall be made and held by it in its own name:’

So section 187(2) provides exeption from above rule of holding investments in its own name in the given situations which you had mentioned above.

Ajay Kumar Maggidi

Manager - Finance & Accounts

2178 Points Posted on 16 January 2015

Originally posted by : CA Sweta Solanki
	Section 187 of the Act requires companies to hold ‘investments’ in its own name. I n this regard Section 187 (1) of the Act reads as below: ‘All investments made or held by a company in any property, security or other asset shall be made and held by it in its own name:’ So section 187(2) provides exeption from above rule of holding investments in its own name in the given situations which you had mentioned above.