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Jay Agarwal (CA)     07 July 2009

About Corporate Guarantee

Is there any legal requirement to be complied with under banking law/ company law or any other law if a company is providing a corporate guarantee to another company while applying for term loan / working capital from a bank.



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 3 Replies

PC Agrawal (PCS)     20 July 2009

You have to pass Board resolution for the same.  If it is a public co., follow procedure u/s 372A of Companies Act.  Corporate Guarantee per se does not create any charge on company's property.  However, some bankers insist for filing Form 8 which is not correct.

 

1 Like

Kumar Ankit (Student)     30 March 2011

Can a wholly owned subsidiary give a gurantee on behalf of its parent company?


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