Interpretation of section 372a of companies act 1956 pdf

In the companies act, 1956 section 372a deals with inter corporate. Complete list of sections of companies act, 20 corporate. The issue has been examined with reference to applicability of section 372a of the companies act, 1956 visavis section 185 of the companies act, 20. See gazette of india, extraordinary, 1956, part ii, section 3, p. As per settled principle of interpretation, special provision shall prevail over. Lesson 16 intercorporate loans, investments, guarantees and security 1 lesson outline. Companies act 1956 by study material lecturing notes pdf. Clarification with regard to applicability of provision of section 372a of the companies act, 1956. Punishment for contravention of section 73 or section 76. Section 6 of the general clauses act, 1897 10 of 1897 to apply in.

The meaning of the word layer has been stated under section. Lesson 16 intercorporate loans, investments, guarantees and security 5. Lesson 16 intercorporate loans, investments, guarantees. Clarification under section 372a3 of the companies act. Also, once section 186 under the act is notified, the corresponding section 372a under the companies act, 1956 would be repealed and clarification provided under this circular would cease to be valid.

If you agree then only proceed to download companies act 20 pdf. The explanation provided in section 372a of companies act, 1956 to the effect that loan includes debentures or any deposit of money made by one company. Provided that the provisions of this subsection shall not affect. Explore the companies act 20 and companies act 1956. Book companies act 1956 pdf download book companies act 1956 by pdf download author written the book namely companies act. Whether this will amount to investment under the provisions of section 372a of the companies act, 1956 for the listed company. Section 372a of the companies act,1956 corporate law forum. Lesson 16 intercorporate loans, investments, guarantees and security 5 1862c of the act, 20.

Registrar and offices for registration of companies. Section 372a inter corporate loaninvestmentguarantee. A company, whether by itself or together with its subsidiaries hereafter in this section and section 373 referred as the investing company, shall not be entitled to acquire, by way of subscription, purchase or otherwise whether by itself. As per section 231 of the income tax act 1961, person includes. Companies registered under securities exchange board of india sebi. Provisions as to certain loans which could not have been made if sections 369 and 370 were in force. As per the provisions of section 372a of the companies act, 1956, a company cannot, except with the permission of the. Penalty for contravention of section 369, 370 or 370a. Applicability of section 372a companies act 1956 abcaus. Section 372a of the companies act, 1956, specifically exempts any loans made, any guarantee given or security provided or any investment made by a holding company to its wholly owned subsidiary. Comparison of section 186 of companies act, 20 and. Such bonds were also provided for in budget 2012, but the response had been poor due to restrictions under section 372a3 of the companies act, 1956. At the time of doing so the companys management need to check the compliances of provisions of section 292, 58a and 372a of the companies act, 1956. Ministry of finance had drawn the attention of this ministry to section 372a 3 of the companies act with a view to effectively implement the announcement made in the budget.

Section 7 interpretation of person in accordance with whose directions or instructions directors are accustomed to act. Act, 1960, choose not more than two of those companies as companies in which he wishes to continue to hold the office of managing director or manager, as the case may be. In this code, unless the context otherwise requires, the expressions defined in the first schedule hereto shall have the meanings assigned to them in. Definitions of company, existing company, private company and public company.

It is a subject matter of interpretation that whether section 186 of the. Impact of companies act on private companies, one person. Interpretation of provisions relating to prospectuses. Download the complete list of all sections of companies act 20 in pdf format. Clarification on section 185 of the companies act, 20. Companies act 20 vs companies act 1956 the companies act, 20 has been passed by lok sabha as well as rajya sabha and the president has given his consent to the same in august 20. In pursuance to the provisions of section 1861 of the act, a company shall. Clarification on section 372a of the companies act, 1956. Comparison of section 186 of companies act, 20 and section. Insight on section 186 of the new companies act, 20.

Section 372a of the companies act, 1956 the act deals with intercorporate loan. Have included the probe of the proposed changes of companies amendment bill, 2016. Companies act 1963 act 179 section 1commencement spent. In a jv company wherein the indian listed company is providing know how and in lieu of that the jv company is allotting shares of 25%. The companies act, 1956 existing act contains 658 sections and xv schedules. When a company invest in the shares of other company, they give loan to other company and some time issues guarantee on their behalf, other than its ordinary course of business. Further, the exemption available from the provisions of section 372a of the 1956 act to private companies as. There is no such condition in section 185 of companies act, 20 and section 372a of companies act, 1956. Guidance note on section 227 3e and f of the companies. The ministry of corporate affairs vide its general circular no.

Companies acts section 185, 186 and 372a ambiguities. All the four transactions are frequently taken place in any company and henceforth the section becomes more important and therefore it requires to special heed by virtue of strict penal provisions and. Guidance note on section 227 3e and f of the companies act, 1956 revised the above guidance note provides guidance to the members in reporting on clauses e and f of sub. Indian companies act 1956 jun 2011 study material download. Inter corporate loans and investments law times journal. Companies act, 1956 bare acts law library advocatekhoj. In terms of section 372a of the act, the making of investments or giving guarantees or providing security in connection with a loan and. An act to consolidate and amend the law relating to companies and certain other associations.

Section 185 and 186 loans and investments by company. Application of act to existing companies and savings. In this connection, it is hereby clarified that registers maintained by companies pursuant to subsection 5 of section 372a of companies act, 1956 may continue as per requirements under these provisions and the new format prescribed vide form mbp2 shall be used for particulars entered in such registers on and from 1. Inquiry into working of sick industrial companiessections of companies act, 1956. The curious case of section 4 7 of the companies act, 1956. In pursuance to the provisions of section 1861 of the act, a company shall make investment through not more than two layers of investment companies. These sections are updated and extracted from the ebook on the companies act 20 by aubsp. The companies act, 20 provisions relating to loans and. Section 372a of 1956 act covers only body corporate, whereas section 186 of the 20 act covers perons and body corporate. The curious case of section 4 7 of the companies act, 1956 this issue is of paramount importance for foreign companies having majority shareholding in indian companies since classification as a. The ministry of corporate affairs mca vide its general circular no.

Share capital to stand increased where an order is made under section 814 95. Section 186 of companies act, 20 loan and investment. Under the companies act, 20 inter corporate loans and investment plays a. Be it enacted by parliament in the sixth year of the republic of india as follows 1.

The word person has not been defined under the 20 act. Notice pursuant to section 192a2 of the companies act, 1956 the company proposes the following resolution for approval by its members by postal ballot in accordance with section 192a of the companies act, 1956 the act and rules made under the act, seeking approval of its members in terms of section 372a of the act. Loan, guarantee, security, investment made vinod kothari. Section 372a of the ca 1956 was applicable only to public companies. This circular will apply till section 186 is notified, and if and when section 186 is notified, there will be again ambiguity as section 186 does not grant exemptions in holding and wholly owned subsidiary cases like section 372a does. Prohibition of partnership exceeding twenty m embers. Section 372a of the companies act legal service india. As we know that the companies act, 20 has now replaced the decades old companies act, 1956 which was amended tons of time.

Pdf companies act 1956 and 20 pdf download, high quality. Section 372a of the companies act, 1956 the act deals with intercorporate loan, investment, guarantee and securities in connection with loan. Definitions of company, existing company, private company and public company 4. Investments by company section 185 and 186 of companies act, 20 procedural aspects, carve outs, implication of violations, etc. The bottom line the clarification provided by mca clarifies one of the areas of confusion interpretation relating to. Clarification with regard to applicability of provision of. The pdf file you are about to download is not created by writinglaw. There is no such provision under section 372a of erstwhile companies act, 1956. Mca clarification under section 372a3 of the companies. The company is a one person company within the meaning of section 2 62 of the companies act, 20 and accordingly limits the number of its member to one person. Companies act 1956 the act and rules made there under, seeking the approval of its members in terms of section 272a of the act.