Dear Freinds,
Can you please help me out with one Query...
Our Company Abc Pvt Ltd intends to borrow unsecured loan i.e a term loan from a Nbfc Company (non banking financial Co) .In our case the reserves and surplus is negative... my query is
In reference to the section 180 of the companies Act 2013 which says that the borrowings should not exceed paid up capital and frees reserves as per which are we supposed to consider the negative reserves or Surplus?
Also the exemption given to this section which says that Explanation.—For the purposes of this clause, the expression “temporary loans”means loans repayable on demand or within six months from the date of the loan such as short-term, cash credit arrangements, the discounting of bills and the issue of other short-term loans of a seasonal character, but does not include loans raised for the purpose of financial expenditure of a capital nature.
Do we come under the above category of temporary laon as we are taking loan for short period.repayable on demand.
Regards
Namrata Pai