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Proprietor with two firms can give Unsecured Loan to other firm?

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Rohit sharma

5 Points Posted on 20 March 2024

I have Two Proprietor firms:

Firm A

Firm B

I have Credit limit in Firm A for running Business, But Now I am expanding Firm B Business, I need Immediate Funds for the Expansion.

The question is Can Firm A give unsecured loan to Firm B from CC limit?

Both are registered in my PAN number. Looking for CA Advice in this matter.

Replies (5)

Quick Summary

A proprietor with two separate firms, Firm A and Firm B, is seeking advice on whether Firm A can provide an unsecured loan to Firm B using its existing credit limit. Both firms are registered under the same PAN number but have different GST registrations and operate in different sectors (sales vs. services). The proprietor has already been advised against clubbing credit limits by their bank.

RAJA P M

"Do the Right Thing...!!!"

128157 Points Posted on 20 March 2024

Yes, You can give.

C M SIMON

CHIEF MANAGER

35 Points Posted on 20 March 2024

It would be more appropriate if you approach the financing bank for making the limit common for both the firms. With their permission, you can utilise the limit, in both the firms.