Inter corporate loans

Raj (Finance Professional) (28 Points)

06 January 2014  

There are two private companies with same directors. Both are sister concerns but not subsidiary. 

- Can one company give loan to another?
- Is there any restriction on loan amount?
- The company to which the loan has been given is in loss. What are the implications if that company is converted to a 100% subsidiary by using the loan given.

Thanks for your help.

Raj