Issue of corporate guarantee

This query is : Resolved

KALYANA SUNDARAM.T.V. (Querist)
Follow

13 January 2012 My company is a closely held public limited company and is a subsidiary company.

We have received fund based and non fund based sanctions from SBI.

The property of the parent concern is given as collateral in our case apart from lien on their plant and machinery.

Now my question is for what amount my parent company has to give corporate guarantee to SBI for and on behalf of us as per the provisions of companies act viz., it is for the full sanction value or any limit is stipulated.

CS Ankur Srivastava

CS Ankur Srivastava (Expert)
Follow

13 January 2012 Unless contrary is specified, the guarantee is to be treated on the full sanction value.

section 125 and 372A are to be complied with and form 8 is to be filed by the both companies.

Loan taking company is also required to check it borrowing powers.

Message likes : 1 times

KALYANA SUNDARAM.T.V.

KALYANA SUNDARAM.T.V. (Querist)
Follow

13 January 2012 As per section 372-A the guarantee has to be issued for 60% of the paid up capital (+) free reserves or 100% of free reserves which ever is higher.

Now please tell me the value of corporate guarantee is for the actual sanction value or as per the stipulations mentioned in the above said act.

Upgrade to CAclubindia Pro. Subscribe Now!

CS Ankur Srivastava

CS Ankur Srivastava (Expert)
Follow

13 January 2012 As per section 372A in case of guarantee exceeds 60% of the paidup capital and free reserves or 100 % of free reserves which ever is higher then consent of the company be way of special resolution is required.

Below that limits the company can give guarantee by just passing board resolution.

Guest

Guest (Expert)

13 January 2012 Agree with Ankur.

Also it it reiterated form 8 should be filed by both companies.

Thanks

Guest

Guest (Expert)

13 January 2012 Also if SR is passed file form 23 with ROC alongwith form 8.

KALYANA SUNDARAM.T.V.

KALYANA SUNDARAM.T.V. (Querist)
Follow

17 January 2012 If the same is required for the sanctions received in 2008 & 2009 can it be ratified now. If so how?

KALYANA SUNDARAM.T.V.

KALYANA SUNDARAM.T.V. (Querist)
Follow

17 January 2012 If the same is required for the sanctions received in 2008 & 2009 can it be ratified now?. If so how?.

Upgrade to CAclubindia Pro. Subscribe Now!

Guest

Guest (Expert)

17 January 2012 Form 8 is required to be filed within 30 days of event and further period of 30 days with additional fees.

After expiry of 60 days (as aforesaid) you need to apporach CLB for condonation of delay.