What is inter corporate loans and investments?

When a company provides loan, security or guarantee to another company or any entity is termed as inter-corporate loans. A firm can provide loans, investment, guarantee or security to another company after taking consent from the board of directors or shareholders. …

Is inter corporate loans allowed?

Inter-corporate loan satisfies all the need and necessity of a capital source of a company. A company only after getting consent and approval of the Board as well as shareholders entitles to provide an inter-corporate loans to another company or body corporate.

What is inter corporate deposits as per Companies Act, 2013?

Deposits have been defined under the Companies Act, 2013 (“2013 Act”) to include any receipt of money by way of deposit or loan or in any other form by a company. However deposits do not include such categories of amounts as may be prescribed in consultation with the Reserve Bank of India (“RBI”).

What are inter corporate loans and investments according to Companies Act 2013?

To simplify the functioning and processes of a company, Section 186 of the Companies Act, 2013 has introduced a few modifications in the concept of Inter Corporate Loans and Investments made by the company. This act defines laws by which a company can or cannot give loan, guarantee, and security or make an investment.

What is the Register of inter corporate loans and investments?

The Act also provides for the restrictions on investments and loans a company can make. The provisions of inter corporate loans and investments has been considerably, modified by inserting the section 186 in the Companies Act, 2013. What is the register of inter corporate loans and investments?

Is it a deposit or inter corporate loan?

It may be a loan and generally termed as Inter-Corporate Deposits, yet they are not deposits under the Companies Act 2013. Section 186 of the Companies Act, 2013 allows a Company to invest in other companies subject to a restriction on layers of investment.

Is there a limit on inter corporate loan?

The inter-corporate loan is extremely useful for the following reasons. On very short notice, cash is available to any corporate. According to the Companies Act, 2013, there are certain limits on inter-corporate loan. All the companies have following restrictions on the maximum amount of the inter-corporate loan.