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.
Jay Agarwal (CA) 07 July 2009
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.
Guest (Guest) 07 July 2009
If that creates charge on the assets of the Company then need to file E-form 8 with RoC for Creation of Charge.
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.
Kumar Ankit (Student) 30 March 2011
Can a wholly owned subsidiary give a gurantee on behalf of its parent company?
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