loan by subsidiary to its Holding

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Can a subsidiary give loan to its Holding company ? whether provisions of Section 295 would be attracted ?? if yes plz give reasons...

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Dear Kanika,

The provisions of Section 295 would be attracted i.e. prior approval of Central Govt. would be mandatory in such case.

Kindly refer to Section 295(1)(a). I m reproducing Clause (a) for your perusal "any director of the lending Company or of a Company which is its holding Company or any partner or relative of any such director".

However, if the holding Company is a Private Company, then Section 295 will not be attracted (kindly refer Clause(s) (a), (b) and (c) of Sub - Section (2) of Section 295.

 

Best Regards

 

 

still not clear.....


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