Can a Private Limited Co give unsecured loan to Public Comapny(Unlisted). Share Holders of both the comanies are 70% same
rahul saraf (Chartered accountants) (89 Points)
24 December 2009Can a Private Limited Co give unsecured loan to Public Comapny(Unlisted). Share Holders of both the comanies are 70% same
rahul saraf
(Chartered accountants)
(89 Points)
Replied 28 December 2009
Its seems no one has the answer for the same in the forum
Amir
(Learner)
(4016 Points)
Replied 28 December 2009
Hi Rahul, Since Sec 295 is not applicable on Private Companies hence there is nothing to stop a Private ltd. Co's to grant Loan to a Public Co's (with 70% common shareholding)...Only thing is to Look for is the OPERESSION or MISMANAGEMENT i:e interest of Minority Shareholders in the Private Limited should not be affected with this Transanction of Loan..Refer EXCEPTIONS TO THE RULE OF "FOSS v/s HARBOTTLE"
Amir
(Learner)
(4016 Points)
Replied 28 December 2009
Click on the Link to see the Judgement in the case of Foss v/s Harbottle and exceptions to the rule..
https://en.wikipedia.org/wiki/Foss_v_Harbottle#Exceptions_to_the_rule
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