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LIMIT TO INVEST IN SH & MF BY CO.

DIPAK AGARWAL (Service) (554 Points)

05 January 2008

is there any limit/or how much can be invested in shares & mf by a Pvt Ltd. co. and Public Co. whose core business is other than investments?

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3 Replies

CA AYYAPPA (Chartered Accountant) (272 Points)
Replied 06 January 2008

NO LIMIT

(Guest)

no. there isn't any.

astha (CA, CS) (85 Points)
Replied 07 January 2008

While investing in shares of other body corporates , a public limited company has to comply with Sec 372A of the Companies Act i.e a company cannot invest an amount exceeding the higher of: a) 60% of the paid up share capital and free reserves OR b) 100% of the free reserves. If the Co. wants to invest more than the aforesaid limit then a special resolution has to be passed before doing so.