28 August 2010
can somebody tell me how much loan can a manufacturing limited company can give, having authorized capital of Rs. 1 crore and paid up capital of Rs 87 lacs. with a turnover of Rs 50 crores. Plz reply
28 August 2010
The limit is as per Section 293(1)(d) for limited companies as under
borrow moneys where the moneys to be borrowed, together with the moneys already borrowed by the company (apart from temporary loans obtained from the company's bankers in the ordinary course of business), will exceed the aggregate of the paid-up capital of the company and its free reserves, that is to say, reserves not set apart for any specific purpose;
I. e. loan is restricted to the paid up capital + reserves.
Also the limit can be increased by passing a resolution in the general meeting upto a limit as deemd fit.
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