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of <h1>Section 372A of Companies Act, 1956: Limits on Inter-Corporate Loans, Investments, Special Resolutions, and Penalties for Non-Compliance.</h1> Section 372A of the Companies Act, 1956, regulates inter-corporate loans and investments by limiting a company's ability to make loans, provide guarantees, or acquire securities of other corporations beyond specified thresholds. If these limits are exceeded, a special resolution must be passed in a general meeting. Exceptions exist for certain companies like banking and insurance firms. Companies must maintain a register of such transactions, open for inspection. Non-compliance results in penalties, including fines and imprisonment. The section outlines specific exemptions and mandates that no loans be made at interest rates below the prevailing bank rate.
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