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Loan and Advance to company by other company

HARIPARA SACHIN (PRACTICE IN INDUSTRY ) (21 Points)

09 July 2022

Hello experts

Can one company give Loan to other company or its Associated or subsidiary more than its share capital, free reserve and security premium?

Thank in advance sir/Mam

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6 Replies

Chirag (Professional) (1979 Points)
Replied 09 July 2022

You Have To Pass Special Resolution In General Meeting

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sabyasachi mukherjee (27119 Points)
Replied 10 July 2022

Not general meeting but extraordinary general meeting.

Chirag (Professional) (1979 Points)
Replied 11 July 2022

@ Sabyasachi It can be passed in AGM/EOGM whichever is early ...

(Guest)

Just to add to the points already made by the Professionals, as per section 186 the Special resolution must be passed 'prior' to giving the loan in any general meeting.

sabyasachi mukherjee (27119 Points)
Replied 14 July 2022

YES GENERALLY LOAN GIVING AND TAKING IS A NATURAL PHENOMENON. SO CHIRAG WHICHEVER IS EARLIER DOES NOT ALWAYS APPLY.

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Chirag (Professional) (1979 Points)
Replied 14 July 2022

Ordinary Course In Business Only when certain criteria are fulfilled ,if the question relates to Nbfc/bank then there is no need for any approval even exceeding NW , or when the borrower is WOS which is not in this case ,so PRIOR member approval in general meetings is essential ....