Section 372a
This query is : Resolved
19 August 2013
Whether section 372A is applicable to NBFC's?
19 August 2013
thanx for quick reply.........but can u explain section 372a...........
19 August 2013
You are welcome Sonia…
372 A relates to Intercorporate loans and Investments. It basically says, that a company can give loan or advance to another company to the maximum of 100% of its free reserves or 60% of Paid up Capital plus free reserves, whichever is higher.
If the company wants to go beyond this limit, it has to pass a special resolution in a General Meeting
372A does not apply to following
1. Loan / Guarantee / Security / Investment made / given by:
A Bank, Insurance Company in ordinary course of business, Housing Finance Company,
A Company established with the object of financing industrial enterprises or providing
infrastructural facilities,
A Company whose principal business is the acquisition of shares, stock, debentures or
other securities,
A Private Company, unless it is a Subsidiary of a Public Company.
2. Investment made in shares allotted u/s 81(1)(a), i.e. Rights Shares,
3. Loan made by a Holding Company to its wholly – owned Subsidiary,
4. Guarantee given or security provided by a Holding Company, in respect of loan made to its
wholly – owned Subsidiary, or
5. Acquisition by a Holding Company by way of subscription, purchases or otherwise, the
securities of its wholly – owned Subsidiary.
Hope it is clear…if you have any doubts…feel free to ask
372 A relates to Intercorporate loans and Investments. It basically says, that a company can give loan or advance to another company to the maximum of 100% of its free reserves or 60% of Paid up Capital plus free reserves, whichever is higher.
If the company wants to go beyond this limit, it has to pass a special resolution in a General Meeting
372A does not apply to following
1. Loan / Guarantee / Security / Investment made / given by:
A Bank, Insurance Company in ordinary course of business, Housing Finance Company,
A Company established with the object of financing industrial enterprises or providing
infrastructural facilities,
A Company whose principal business is the acquisition of shares, stock, debentures or
other securities,
A Private Company, unless it is a Subsidiary of a Public Company.
2. Investment made in shares allotted u/s 81(1)(a), i.e. Rights Shares,
3. Loan made by a Holding Company to its wholly – owned Subsidiary,
4. Guarantee given or security provided by a Holding Company, in respect of loan made to its
wholly – owned Subsidiary, or
5. Acquisition by a Holding Company by way of subscription, purchases or otherwise, the
securities of its wholly – owned Subsidiary.
Hope it is clear…if you have any doubts…feel free to ask
19 August 2013
as you replied that it is not applicable to NBFC.....it is nowhere written in the section......is it your opinion or is it written somewhere?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- ITC temporary reversal and reclaim
- GST on export of services and Input Credit
- Applicable TDS rate for sale of property in Nov 2024
- Inventory of finished goods
- GST ON EXPORT COMMISSION
- RCM INVOICING FROM NOV-2024
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- ITC EXCESS CLAIM + RCM NOT PAID...BOTH FOR FY 2020-21......PAID IN FY 2024-25....EFFECT
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
Trending Online Classes
CAclubindia
