Can a Indian Pvt Ltd Co. take loan from another Indian Pvt L

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Querist : Anonymous

Querist : Anonymous (Querist)

04 February 2011 Hi, i have 1 query that is Can a Indian Pvt Ltd Co. take loan from another Indian Pvt Ltd Co.? if yes so is there any limitation and what is the interest rate on that loan this should be as per Indian taxation.
Regards
Ambadas Mittha

udit sharma

udit sharma (Expert)
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05 February 2011 The provisions of section 372A are not applicable to an Independent Private Company. As the said provisions are not applicable to an Independent Private Company, it can grant an interest free loan to other body Corporate.

God Bless

CS Udit Sharma

udit sharma

udit sharma (Expert)
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Querist : Anonymous

Querist : Anonymous (Querist)

07 February 2011 i need more expatiation on the above..
Regards
Ambadas Mittha

ADITI BIDASARIA

ADITI BIDASARIA (Expert)
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07 February 2011 Yes Sec 372A of the Companies Act, 1956, relating to inter corporate loan and advances does not apply to private ltd. Companies. So private companies are free to take inter-corporate loan. Further the rate of interest should be as per the market rate of interest.

Querist : Anonymous

Querist : Anonymous (Querist)

08 February 2011 Ok, then can you tell me what about other than inter corporate. I mean if x pvt. ltd. co take loan from Y pvt. ltd. co. so what is the limit and what is the rate of interest on the same.
With regards
Ambadas

Querist : Anonymous

Querist : Anonymous (Querist)

ADITI BIDASARIA

ADITI BIDASARIA (Expert)
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15 February 2011 Inter Corporate Loan means one Company giving loan to another Company. So your question I did not get i.e. other than intercorporate and ur meaning of that.Other than intercorporate means two companies are not involved in the loan, as a borrower and and as a loan provider.

In Pvt. limited Company there is no limit, but before giving loan you should check Income Asset Pattern of your Company. If after providing loan, >50% of the income is coming from the financial assets, so the nature of the Company will be changed to NBFC Company and You need to register the Company as NBFC Company. So first check out the details, before considering anything.

Rate of interest depends on the various factors.
1. Current Market rate of Interest
2. Rate of Interest charged by the other Companies.
Generally u can provide a loan at a reasonable rate of interest.

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Querist : Anonymous

Querist : Anonymous (Querist)

15 February 2011 Thanks Aditi for your kind information

Regards
Ambadas