Icd to a private limited company by a listed company
Aryan
(Querist) 16 December 2016
This query is : Resolved
Hello Experts!!
Please let me know can a public limited company (Listed) give Inter corporate loan (ICD) to a Pvt limited company as per Companies Act 2013?
Also let me know, what will be the scenario if the pvt ltd company to which ICD given is a group company wherein few directors are common.
Thank you!!
Rajendra K Goyal
(Expert) 16 December 2016
Academic query.
State material facts of the problem if any.
How are you concerned / related with the query?
R.K Nanda
(Expert) 16 December 2016
academic query.
Aryan
(Querist) 17 December 2016
The above example relates to my job profile.
Our company is required to transfer ICD to two pvt ltd cos. One out of which is a group co as stated above.
Plz explain
Advocate. Arunagiri
(Expert) 17 December 2016
What is the nature of business of the parent company? Whether the company is in lending business? or the parent company is investing in the subsidiary company for a venture?
Based on this I can give my opinion.
Guest
(Expert) 17 December 2016
Arunagiri is a Director of Gemmia oil tech Ltd which is Fake company Presently With no address and its Market Value Once touched Rs 900 Crores and He had submitted a valuation report of rs 2500 crores to A company called Naftogaz india Ltd to be Taken Over by his company Gemmia Oil tech with Pure intention Of cheating Indian Public. All this could be Verified in BSE website.So better Be Cautious
Rajendra K Goyal
(Expert) 17 December 2016
Some of the expert instead of giving any fruitful reply to the query prefer to criticize / comment other experts on their personal background (which may or may not be correct) or otherwise. Mostly comments are not related with the query. If any reply is not proper in relation to the query either it should be left for the author to act or not or should be pointed out maintaining mutual respect.
Experts are sparing their valuable time for this site and their effort should not be rewarded / recognized in this way.
It is humble request to all experts to maintain mutual respect, due regard and decorum.
Aryan
(Querist) 17 December 2016
Few more details :-
The companies, i am referring above are in the field of manufacturing sector. Their prime business is not lending/accepting money.
There is no relationship of Holding or subsidiary between the companies.
But for my information, also let me know the legal scenario if they were in Holding/ subsidiary relationship .
Thank you!!
Advocate. Arunagiri
(Expert) 17 December 2016
As per the companies Act 2013
S.186 (2) No company shall directly or indirectly —
(a) give any loan to any person or other body corporate;
(b) give any guarantee or provide security in connection with a loan to any other body corporate or person; and
(c) acquire by way of subscription, purchase or otherwise, the securities of any other body corporate, exceeding sixty per cent. of its paid-up share capital, free reserves and securities premium account or one hundred per cent. of its free reserves and securities premium account, whichever is more.
Rajendra K Goyal
(Expert) 17 December 2016
Agree with the reply from Advocate. Arunagiri on this academic query.
Guest
(Expert) 17 December 2016
Please Refer My Above Post about arunagiri
Guest
(Expert) 19 December 2016
Related to the Well Wishing of the Author/Querist
Aryan
(Querist) 19 December 2016
I am little bit confused while interpreting this section.
Following is my interpretation, please correct me if i am wrong:
A company can give loan or guarantee or provide any security to other company/ person, (whether related/ not) up to limits specified under sub-section (2).
If it exceeds then prior approval by means of a special resolution passed at a general meeting shall be necessary.
One of our consultants is of the opinion that the ICD transaction is not valid as per CA 2013, as Public ltd co is providing loan to Pvt ltd co, which is a group co also.
Please explain on the above.
adv.bharat @ PUNE
(Expert) 19 December 2016
please refer section 186(2) of company act 2013 for details.
Aryan
(Querist) 20 December 2016
Please let me know, is there any remedy, if the ICD has been given to the other company and the Board resolution as required is not passed by the company? The concerned company which is providing the ICD is a listed one.
What immediate action the company is required to take in this scenario?
Ms.Usha Kapoor
(Expert) 26 December 2016
Public limited company can provide inter corporate loan to Pvt ltd company including a group company.Balance 40% can be provided by special resolution by the public ltd company.
