Anny Jain (ACS) (103 Points)
20 July 2011Sec 295 is applicable to public ltd. co. but suppose a A pvt. ltd. extends corporate guarantee for another co. later, during the existence of the said guarantee, A pvt. ltd. converts into A ltd. then does A ltd require CG approval for the existing guarantee given by it at the time when it was a pvt. co.?
Nidhi Jain
(CS )
(987 Points)
Replied 20 July 2011
Please clarify the situation how Section 295 is applicable in ur co. from ur problem it seems the case of 372A.
Anny Jain
(ACS)
(103 Points)
Replied 20 July 2011
A pvt ltd gave corporate guarantee on 21.07.10 for B pvt ltd in which Mr. X is a common director. Since A was a pvt co. sec 295 was not applicable. on 18.07.2011 A pvt. ltd. converted to A Ltd. Till this time the guarantee still prevailed. Now does A require to fulfil sec 295 conditions?
Nidhi Jain
(CS )
(987 Points)
Replied 20 July 2011
I think u r problem is common director but loan taken by B Ltd for its own benefit and such loan not taken by Director. I m right ?
Anny Jain
(ACS)
(103 Points)
Replied 20 July 2011
yes loan has been taken by the co., not director. but sec 295(1)c provides loan/guarantee given to any pvt co. of which such director is a director. so by that provision sec 295 becomes applicable once A converts into public ltd co.
Prashanth
(Chartered Accountant)
(2322 Points)
Replied 11 August 2011
Dear Anny jain
As per sec-295 if any exempted company ia later converted into ltd company in such case sec will not apply
CAclubindia
