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Intercorporate loans & guarantees

MCA 533 views 1 replies

meena gupta

32 Points Joined June 2013

Hi Everyone,

Can a holding company give a corporate gauarantee to the third party for its subsidiary company which is holding 99.9% shares in the holding company. If yes, then what is the procedure for the same. Please guide.

Thanks,

Meena Gupta

Replies (1)

nidhigoel89

Company Secretary

596 Points Joined December 2009

Dear Ms. Meena,

Your query needs some more clarification:

I am giving my views on the presumption that A is the holding company B is the subsidiary company and C is the third party. Now i think your query is can A gives gurantee to C for providing loan to B.

Sec 372A is not applicable to Private company. Taking into your case if its a Public company then also i think it would be exempted as per the Sec 372 A (8) (d).

I hope i have understood your query in right manner.

Nidhi