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V.S. Datey on Companies Act, 2013
  • Interest free loan to subsidiary

    by Kamal Garg on Friday, February 08, 2019 at 02:57 PM

    can interest free loan be provided to subsidiary by the holding company

    Replied byV.S. Datey Saturday, February 09, 2019 at 06:37 PM

    if wholly owned subsidiary then it can be argued that provisions relating to loans etc. do not apply Otherwise - no The interest to be charged by the company on loans shall not be less than the prevailing yield of one year, three year, five year or ten year Government Security closest to the tenor of the loan [prevailing G-Sec rate] - section 186(7) of Companies Act, 2013 [section 372A(3)of the 1956 Act]. V S Datey

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