Unsecured loan

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 April 2013 Hi Sir,
An urgent query:
Can a Pvt. Ltd. provide with unsecured loan to another Body Corporate, also being a pvt. ltd.,
And can a Pvt. Ltd. take unsecured loan from another Pvt. Ltd., Does it amount to Deposit U/s 58A. Companies are falling under the same management.

Thanks in advance

Ankur Garg

Ankur Garg (Expert)
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19 April 2013 According to me a private company can provide unsecured loan to another private company. Likewise a private company can take unsecured loan from another private company.

Both the above situation will not be covered by section 372A, as section 372A regarding inter corporate loans is not applicable on private companies. Further there is no question of involvement of public at large so the above transaction will also not be covered by section 58A.

Thanks