Loan by a public company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 June 2012 If a public company wants to give loan to another company whether it is necessary that the MOA of lending company pemits to give loan to another company. my query is that whether it is necessary that in the MOA of lending specific permission is granted for providing loan to another company and in the absence of such permission in MOA whether the loan given shall be ulta virus.

Ajay Mishra

Ajay Mishra (Expert)
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08 June 2012 Hi

As per my understanding, if you want to mention such object your company will be treated as NBFC company.

Regards

Querist : Anonymous

Querist : Anonymous (Querist)

08 June 2012 It means our company can provide loan to another company by following the provisions of Section 292 and 372A, even our MOA dosent provide specific permission for giving loan to other body corporates.

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CS, Deepak Pratap Singh

CS, Deepak Pratap Singh (Expert)
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08 June 2012 Dear friend,It is not necessary that MOA of a company permits borrowing or lending. A Trading firm can borrow or lend if there is not any such provision in the MOA. It is understood in the law. Now you have to follow provisions of Section 293, 295 and 372A of the Companies Act, 1956 in this regard. Thanks