Loan to subsidiaries under ca 2013

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 March 2014 Can holding companies provide loan, guarantees in favour of their subsidiaries(indian & overseas) in cases of common directorship?

Aashish Jain

Aashish Jain (Expert)
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27 March 2014 1. In case of the Indian subsidiary where there are common directors and such subsidiary is a private company then giving loan or guarantee is prohibited...

2. If the Indian subsidiary is not a private company then you have to check whether 25% share capital of the subsidiary is held by directors of holding company...

3.Same 25% share capital you will have to check in case of overseas subsidiary...

4. Also please read explanation (e) to section 185(1)...

5. Abide by the limits of section 186...

Aashish Jain

Aashish Jain (Expert)
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28 March 2014 Today MCA has notified rules for board meeting and its powers... refer rule 10...

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