Inter corporate loan restrictions limit company loans and investments without special resolution and impose register and penalty obligations. The provision limits company loans, guarantees and acquisitions of securities by reference to capital and reserves and mandates prior authorization by a special resolution for transactions exceeding those limits; loans must carry at least the prevailing bank rate. Companies must keep a register with debtor or investee identity, amount, terms, purpose and transaction dates. Penalties apply for failure to maintain the register and for other breaches, including fines and imprisonment for officers in default. Exemptions include ordinary course dealings with regulated lenders, securities companies, intra group wholly owned transactions and pro rata allotments to existing shareholders. Investments must be held in the company's own name.
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.
Inter corporate loan restrictions limit company loans and investments without special resolution and impose register and penalty obligations.
The provision limits company loans, guarantees and acquisitions of securities by reference to capital and reserves and mandates prior authorization by a special resolution for transactions exceeding those limits; loans must carry at least the prevailing bank rate. Companies must keep a register with debtor or investee identity, amount, terms, purpose and transaction dates. Penalties apply for failure to maintain the register and for other breaches, including fines and imprisonment for officers in default. Exemptions include ordinary course dealings with regulated lenders, securities companies, intra group wholly owned transactions and pro rata allotments to existing shareholders. Investments must be held in the company's own name.
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