25 October 2011
According to sec 372A of the companies act 1956 The company can make an Intercorporate loans and investment without the approval of the shareholders upto a maximum of
60% of the Paidup Capital And Free Reserves (Or) 100% of the Free Reserves Which ever is higher.
The amount should be deducted with already made investments and loans. Here the free reserves means the amount that can be free distributable which has specifically includes the Security premium.
This provision does not apply if the Inv (or) loan made -Non Body corporate -100% Subsidiary Company
This section does not apply to a Private company
At the final level.. the practical question will be asked.
keep track of this in the munish bandari Law Hand book
Querist :
Anonymous
Querist :
Anonymous
(Querist)
27 October 2011
MR Rao,
Thank so much for the valuable information.
Pl clarify wether Debentures are also covered in the overall ceiling.