I want to know if a private limited company can lend money to other private/ public companies or individuals?
What would be the legal requirements?
2 Replies
Back in the Game
(a)
(1273 Points)
Replied 31 December 2012
A resolution will be required...but Articles shouldnt prohibit the same....
however ,kindly Check out...Sec 2(22)e...of income tax act.
Cos...this has major tax implications....if loand Advanced is to related parties....
i don ve Expertise in this area....but Certainly don miss out checking this Requirements.
CS Amit Kumar
(CS)
(463 Points)
Replied 01 January 2013
Lending money may change the status of simple company to NBFC, so please ensure what is your principal business and always keep financial assets and financial income below 50% of total assets and financial income.
Because lending of money leads to Financial Institutions profile and FI profile may lead to NBFC if 50% criteria breach.
Regards,
ACS Amit Kumar
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