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LIMIT TO INVEST IN SH & MF BY CO.

DIPAK AGARWAL (Service) (554 Points)

05 January 2008

is there any limit/or how much can be invested in shares & mf by a Pvt Ltd. co. and Public Co. whose core business is other than investments?

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3 Replies

CA AYYAPPA (Chartered Accountant) (272 Points)
Replied 06 January 2008

NO LIMIT

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(Guest)

no. there isn't any.

astha (CA, CS) (85 Points)
Replied 07 January 2008

While investing in shares of other body corporates , a public limited company has to comply with Sec 372A of the Companies Act i.e a company cannot invest an amount exceeding the higher of: a) 60% of the paid up share capital and free reserves OR b) 100% of the free reserves. If the Co. wants to invest more than the aforesaid limit then a special resolution has to be passed before doing so.