Loan limits between companies restrict related corporate lending to a capped share of subscribed capital and free reserves. Rule 11B sets an aggregate ceiling on loans by a company to other bodies corporate, allowing loans to unrelated companies without a special resolution provided the aggregate does not exceed a specified portion of the lender's subscribed capital and free reserves. Exceeding the aggregate cap requires prior Central Government approval. A company that has defaulted on repayment of deposits under section 58A (or interest) is barred from making loans or giving guarantees under section 370 until the default is cured.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Loan limits between companies restrict related corporate lending to a capped share of subscribed capital and free reserves.
Rule 11B sets an aggregate ceiling on loans by a company to other bodies corporate, allowing loans to unrelated companies without a special resolution provided the aggregate does not exceed a specified portion of the lender's subscribed capital and free reserves. Exceeding the aggregate cap requires prior Central Government approval. A company that has defaulted on repayment of deposits under section 58A (or interest) is barred from making loans or giving guarantees under section 370 until the default is cured.
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