Loan to director by special resolution/co. policy

Can a P.Ltd Co give loan to its directors,where company giving loan is a 100% subsidiary of another P.ltd Co.

Where the directors are common in both Holding & Subsidiary Co.

However , holding co is giving loan to its members.

Can  loan be given under special resolution/Co policy.

Replies (2)

According to section 185(1)(c) of the Companies Act 2013, A holding Company can give loan to its wholly owned Subsidiary Company, or any guarntee given or securities provided by Holding Cmpany in respect of its loan made to its wholly owned Subsidiary Company but Provided that Loan shall be utilized by subsidiary Company for its principal Business activities.

Rule 11 of ( Meeting of Board & its Power) Rules, Where loan or guarantee is given or where the securitiy has been provided by the Holding Company in excess of 60% of Paid up share capital and Free Reserves or 100% of Free Reserves whichever is higher without passing special Resolution.

No need to pass special Resolution

In case of P.Ltd Co where other Body Corporates holds investment (Share capital)

1. Is it necessary to charge interest on loans given to Subsidiary Company.

2. Is there any requirement of filing with Roc and any entry in registers under Co Act.

 

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