shareholders approval

Hello,

Provisions relating to Inter-corporate Investment are governed by section 372A but this section is not applicable to a private company (Unless subsidiary of a public company).

So no need to take shareholders’ approval. However a board resolution is required to be passed before investment.

Regards

A . company  can subscribe for share of another company only to the limit of 60% of its paid-up share capital and free reserves or 100% of the free reserve whichever is more.Above this limit the company has to pass a special resolution  in a general meeting.

Dear Preeti,

Mr. Ankur Garg is absolutely right, so kindly rectify yourself & read section 372A carefully.

Dear Navaaz, 

Please check with your Articles of Association, which contains any restriction clauses in respect of investment as like members approval requires for that purpose, otherwise no need members approval for Private Limited.