srinivasarao (advocate) 29 January 2014
Dear Sir,
What is the validity of guarantee issued by the holding company to its subsidery company or Special Purpose Vehicle (SPV) (where it has more than 51% shares in that company) which was executed after 12-09-2013. Please clarify the same basing on the restrictions provided in Sec.185 of New Companies Act, 2013.
Uvais Thinoor (Finance Manager) 31 January 2014
As per notified section, this kind of quarantees or any loans can't be given to another company where any of the director having directorship in borrowing company.
srinivasarao (advocate) 03 February 2014
Thank you sir for your response. Is it not fallen under the exemption of section 185(1) (b) i.e., the guarantee can be given if it is in the ordinary course of business since the SPV's are establishing for fulfilling some projects of the main company? And if the MoA clearily indicates that the company can give guarantee or mortgage its assets for the loans availed by the SPV's establised by them.
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