BHAVIK (Senior Accountant) (37 Points)
05 June 20101 ) One of the Limited Company who is not listed wants to gives Loan or Gurantee to another non listed Limited Company. Can any one tell me what should be the processor to be folllow by both the company as per legal requirements.
2) In the above question Board of Directors are the same in both the companies, then what should be the legal processor to be follow.
vivek
(CS)
(751 Points)
Replied 05 June 2010
This is the matter of Section 372A and a company can make Loans, Guarantees and Investments made so far + Proposed to be made as per the limits: 1. 60% of Paid up Capital + Free Reserves OR 100% of Free Reserves of the Company (whichever is higher) - By passing a Unanimous Board resolution OR 2. If amount exceeds the limit in Sr. No. (1) then by passing a Unanimous board resolution and prior consent of members by passing a Special resolution in a general meeting.
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