Dear Members,
Can anyone please provide me a note on 372A for my better understanding. Its a very crucial section. Need some help regarding understanding the above section. I m litle confused.
Regards,
Mayuri lal
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note on 372A
Replies (2)
Hi Mayuri,
Please find attached note on Section 372A.
Regards
Jaideep Pandya
Section 372 A : Inter - corporate Loans:
1. No Body Corporate can give loan or guarantee to another exceeding 60 % of its paid up capital ( till called up) and
100% of its free reserves. Free reserves; Free reserves shall include Dividened Distribution reserve , Dividened
Distribution reserve & Credit of Securities premium account as per Previous Year Audited Balance sheet and shall
not include Share application money account.
2. Unanimous consent by all directors present in meting is required, if the corporate Guarantee doesnot exceed
60 % of its paid up capital ( till called up) and 100% of its free reserves & Such if the Guaranteed property is So
hypothecated , Filing of Form-8 is required.
3. Besides, if it's decided to give guarantee or loan, exceeding 60% of its paid up capital ( till called up) and 100% of
its free reserves, in such case, EGM should be convened with proper notice & Should be Passed by Special
resolution.
4. Rate of Interest on Loan advanced should not below the Prevailing Bank rate.
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