If somebody has to carry out the transaction where holding company avails Loan facility from the bank and security is to be given by the 100% subsidiary company with corporate guarantee by the subsidiary also ? Can the same be carried out in any manner ??
Inter-corporate loans and guarantees are subject to restrictions and restraints under sections 370 and 372 (as amended) of companies act 1956. Subject to such restrictions, guarantee by subsidiary can be availed.