Sanjay (Associate) (152 Points)
22 April 2017Holding Company have given loans to 4 Wholly owned subsidiaries ("WOS") and to 3 fellow subsidiaries. All are having common directorship. Further all loans are interest free.
So i will need to give Qulaified opinion in Audit report of Holding company for not complying the provision of Section 186 since loans are given at free rate of interest and for Section 185 for giving loan to Fellow Subsidiaries.
Sudhir Todkar
(CS Professional)
(1021 Points)
Replied 22 April 2017
Jatin Bajaj
(CS)
(2930 Points)
Replied 24 April 2017
According to section 185(1)(b) of section 185, Holding Company cannot give intrest free Loan to its wholly owned subsidiary Company for the repayment of Loan and in respect of such Loan , it shall not be charged at the rate of intrest less than the RBI. And further there is no restriction in providing Loan by Holding Company to its wholly owned subsidiary Company even if there are common Directors
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