minimium rate of interest on loan given & taken to sec 301 p

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Querist : Anonymous

Querist : Anonymous (Querist)

26 May 2010 in case of pvt ltd company what is the minimium limit of rate of interest on loan given & taken to & form sec 301 parties

Rasesh

Rasesh (Expert)
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27 May 2010 There is no minimum rate prescribed under the companies act. The rate should not be lower than the average cost of borrowing of the company. Otherwise it would be deemed to be prejudicial to the interest of the members of the company.

Sec 372A states that the rate should not be lower than bank rate. This is not applicable to private limited co.