Urgent Query - Holding company and 100% subsidiary company

 IF HOLDING HAD GIVEN GUARANTEE THEN BANK CAN RECOVER

ELSE NOT

They cannot recover the said loan from B Ltd as though relationship of Holding and Subsidary exists but the operations are different, yes if it is found that the Loan was defaulted with any acts of Holding Ltd than it can be recovered from holding co rest it cannot do so.

hiii.... yes loan can be recover from B LTD...... another aspect if loan is secured against ant asset than it can not recoverable from subsi co.

Recovery of the loan amount (other than by way of particular security or personal guarantee of holding co.) can be effected only when the holding co. exercises control over composition of Board of Directors of the subsidiary co..where the management is deemed to be held responsible in such defaults as they carry the power to raise/utilise finances. Where the control is by way of voting power/equity shares with separate mgmt. responsibilities, then the chances are bleak for recovery on the part of the bank.

Right Answer..

but loan should nt b secured against any specific asset of subsi co.

they can recover from B ltd...............................

 Yes they can recover from B,

The Bank can recover from B, provided the loan is not secured against any asset

if the loan is secured on a particular asset (s) then it cannot recover from holding co. If holding co give gurantee then bank recover from holding co.

First bank will try to recover the same from the assets of A Ltd. If they are failed to collect the full amount then Yes, bank can recover the balance loan from B ltd.

Ya I think it can be recovered from holding company

No..

because the identity of both the companies is different..they have seprate legal entity...so loan of one company cannot be recovered from other..

only if they have corporate guarentee, the bank can recover from BLtd(Holding Company)

Yes loan can be recovered from B ltd

I have a different aspect overall....

Company is a distinct entity...

To cover a holding co. the facts of the case shall be referred...

means to say the terms & conditions of the Contract & agreement of loan shall be the sole basis on which evrything depends...