J.Rajkumar (General Manager) (28 Points)
15 June 2013Can a private Ltd company give unsecured loan/unsecured investment to another Private Ltd company. If can what can be the interest rate at which the company can give loan.
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 18 June 2013
Yes, a private company can give unsecured loan to another private company after passing Board resolution u/s 292(1). Inter-corporate deposits are not covered in the definition of 'deposit' u/s 58A. Provisions of Sec.373A(3) relating to rate of interest are not applicable to private companies and hence the company can charge any rate which is reasonable.
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