A software company has invested Rs.64 lacs in Equity trading Company (Investment in shares)
Will Sec.186 applies to this transaction & what are the remedies available to company.
6 Replies
CS Arjun Rajagopal
(B.com, ACS)
(1056 Points)
Replied 12 March 2016
Sec 186 applies for intercorporate loans and investments. In your case since you have said that your company has invested in shares. It means Your company has invested the funds of the company which will not attract Section 186. But file eform MGT-14 within 30 days from the date of passing of board resolution[Sec 179(3)(e)]
Jyothis
(Article)
(1127 Points)
Replied 13 March 2016
Why investment in shares of Other company doesn't fall under scope of sec.186.
What are consequences if company fails to pass resolution & File Mgt -14.
CS Arjun Rajagopal
(B.com, ACS)
(1056 Points)
Replied 14 March 2016
Please clarify the following:-
Is your company investing in other company's shares thorugh Hedge Equity as stock broker or Investing the money in Hedge Equity?
Jyothis
(Article)
(1127 Points)
Replied 14 March 2016
Our company is IT software support company (A P Ltd Co)-
Invested its surplus fund-All Directors agreed to invest co's fund Hedge equity.
What all are requirements fo complied under Co Act,2013.
Whether Objective clause of MoA to Altered,Mgt-14 filing,Resolution requirement.
CS Arjun Rajagopal
(B.com, ACS)
(1056 Points)
Replied 14 March 2016
Section 186 applies only when your company invests more than 60% of the Paid Up Share Capital and Free Reserves and Securities Premimum Account or 100% of its free reserves and securities premium account whichever is more in other company.
If your company doesn't fall in the above category. Then file eform MGT-14 only within 30 days from the date of passing of board resolution[Sec 179(3)(e)]
Jyothis
(Article)
(1127 Points)
Replied 15 March 2016
Company has invested more than specified limit.
No resolution has been passed till date.
Investments in shares is not stated in MoA.
What are steps to taken by company for clearing the issue.
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