Applicability of section 372a
Vivek Mehta
(Querist) 10 December 2012
This query is : Resolved
One company xyz ltd. has its one of the main objects as trading in gold and providing infra services. In 2010-11 it demerged its infra division and it has now only trading in gold as business.
is section 372a applicable since its a limited company and is no longer provides infra services.
can copany say that just because it is providing infra servies earlier it is exempted from section 372a?
Nadeem Qureshi
(Expert) 10 December 2012
Dear Vivek
in which act you want to know the answer of your query? please ask specific with the name of Act
Raj Kumar Makkad
(Expert) 11 December 2012
It depends upon many facts.
Section 372A of the Companies Act, 1956 deals with inter-corporate Loan, Investment, Guarantee and Securities in connection with loan. All the four transactions are frequently taken place in any company and henceforth the section becomes more important and therefore it requires to special heed by virtue of strict penal provisions and because of no much space to play. Here the author has made an attempt to reduce & brief the provisions of section 372A in analytical way which is more handy to remember and apply rather than to describe it in legal language.
