Loan from Shareholder company

This query is : Resolved

Muralidharan (Querist)
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10 September 2009 Dear Sir

ABC is a private limited company holding 97% shares of a public limited company. In other words the public limited company is a subsidiary of the private limited company.

Can the public limited company avail loan from its shareholder / holding company which is a private limited company.

with regards

Muralidharan

CS Vivek Hegde

CS Vivek Hegde (Expert)
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11 September 2009 Dear Mr. Muralidharan

I do not find any bar on that.

Section 372A which puts restriction on intercorporate loan is not applicable to a loan given by holding co to its subsidiary.

rgds