Investment Company & Object Clause

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This query is : Resolved

CS Lucky Popli (Querist)

30 October 2009 Does anyone can give me true idea regarding INVESTMENT COMPANY...?

Recently i made an INCORPORATION application of a company to ROC & theapplication was rejected on the ground that INVESTMENT cannot be the Main OBJECT of a NON-NBFC company....

Any one knows how a company can make any investment in securities of another company.... is thereany requirement of amending MOA of investing co.

Is their any restriction in this regards...?

Waiting for early response.....

Regards,
CS Lucky

Ankur Garg

Ankur Garg (Expert)

30 October 2009 If one company investing its money (which belong to the shareholders) in the securities of other company then this kind of transaction must be supported by object clause.

In other words if investment is going to be the main business of the company then it must be in the main object of MOA.

However if you want to do 1 or 2 transactions then pass resolution under section 372A.

Read section 372A regarding intere corporate loans and investments.

Regards

CS Lucky Popli

CS Lucky Popli (Querist)

30 October 2009 Thanks for the reply & you Truely said, it should be included in the main objects of the company, and i did so but the ROC rejected the same..

If you have any object clause pls provide me with OBJECT CLAUSE for inter corporate investment...

Thanks & Regards
Lucky

Ankur Garg

Ankur Garg (Expert)

30 October 2009 I think you are misunderstanding the things.

ROC rejected because your object are compitable with NBFC company and you want to incorporate NON-NBFC company.

Kindly observe as your company is a NON-NBFC company you can not have main objects of a investment company. For incorporation of NBFC company procedure is different.

As your company is a NON-NBFC company you can make investment in other company by passign a board resolution under section 372A. No need to add anything in your objects.

CS Lucky Popli

CS Lucky Popli (Querist)

30 October 2009 Thanks for guiding me sir.
I got things clear now.

Regards,
Lucky.

Ankur Garg

Ankur Garg (Expert)

31 October 2009 You are welcome.

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