Holding company boorrows for Subsidiary purpose-CORPORATE LAWS

 THE HOLDING COMPANY BORROWING ADVANCES FROM THE BANK WANTS TO UTIIZE THE AMOUNT FOR THE PURPOSE OF THE SUBSIDARY COMPANY OFFICIALLY.

CLARIFICATIONS :

1..THE SUBSIDIARY COMPANY CANNOT UTILIZE THE AMOUNT OFFICIALLY WITHOUT HYPOTHECATION OF ITS GOODS.  AND WITH OUT HYPOTHECATION OF GOODS, THE BANK CANNOT SECURITIZE THE GOODS OF THE SUBSIDIARY COMPANY.

  

2.THOUGH THE SUBSIDIARY COMPANY MAY NOT BE THE BORROWER OF THE BANK, but  SINCE, IT WANTS TO UTILIZE THE AMOUNT FOR ITS GOODS PURPOSE, THE HYPOTHECATION OF ITS GOODS IS NECESSARY .

3. THE BOARD RESOLUTIONS OF BOTH THE HOLDING COMPANY AND SUBSIDIARY COMPANY SHOULD CLEARLY MENTION THAT THE ADVANCE BORROING BY THE HOLDING COMPANY IS FOR THE PURPOSE OF GOODS, STOCKS OF  BOTH  THE HOLDING AND SUBSIDIARY COMPANY.

4. HERE, THE BOARD RESOLUTIONS RESOLVING THAT THE LOAN AMOUNT FOR THE PURPOSE OF BOTH HOLDING AND SUBSIDIARY COMPANY IS ITSELF IS A CONSIDERATION FOR BOTH THE COMPANIES .

5. THE CHARGE IS TO REGISTERED WITH ROC OVER THE GOODS AND STOCKS OF BOTH HOLDING AND SUBSIDIARY COMPANY.

6. IF THE ADVANCE AMOUNT ( INCLUDING THE ADVANCES FROM OTHER INSTITUTIONS) EXCEEDS THE PAID UP CAPITAL OF THE HOLDING COMPANY, THE AGM OR EGM RESOLUTION IS MANDATORY-

KPKUMAR@LEGALSERVICES

  

ADVOCATES AND SOLICITORS

 

FLAT NO.C, GROUND FLOOR,

“ SAI SADAN ”., 11-13-459/1,

ROAD NO.14, ALAKAPURI,

HYDERABAD-500 035, A.P.                            

 

Phones  : 7702531120

                   9441407470

Email: konidanaphanikumar@yahoo.in         

                                                 

BLOG: KPKUMAR@LEGALAWARENESS  

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