Loan by company

[LILADHAR AGRAWAL]

Hello Sir,

1. I have query regarding loan by company. What are the companies act restriction in providing loan to any company, directors or shareholders.

2. I have read loan given by wholly owned subsidiary co to holding co is exempt. In such case what is WOS co. Let us take an example A and B. A have 99% shares of B ltd. So B is wholly owned subsy of A or it have to acquire 100% shares.

Thanks

AI Summary

Clarification on 'wholly owned subsidiary' under Companies Act: Does 99% shareholding qualify, or is 100% required? A user inquired about the restrictions under the Companies Act regarding loans provided by a company to other companies, directors, or shareholders. They noted an exemption for loans from a wholly owned subsidiary to its holding company and sought clarification on the definition of a wholly owned subsidiary. The user provided an example where Company A holds 99% of Company B's shares, questioning whether B is considered a wholly owned subsidiary or if A must acquire 100% of the shares for this classification.