>>GUIDELINES FOR SECTION 295 & 372 A
CHECK LIST
PLEASE ENSURE WHILE SUBMITTING THE APPLICATION IN
RESPECT OF LOANS / CORPORATE GUARANTEE OR FURNISHING SECURITY UNDER SECTION 295 & 372
A OF THE COMPANIES ACT, 1956 THAT THE FOLLOWING INFORMATION / DOCUMENTS HAVE BEEN
FURNISHED:
1. The application should be addressed to The Secretary, Department Of
Company Affairs, 5th. Floor, "A" Wing, Shastri Bhawan, Dr, Rajendra
Prasad Road, New Delhi –110001
2. Application should be submitted along with the prescribed fee by
demand draft drawn in favour of Pay & Accounts Officer, Department of Company Affairs,
New Delhi in the manner provided by GSR No.501 (E) dated 6.7.1999: -
| For application made By
Companies |
Amount of fee to be paid
in Rs. |
| With Authorised share capital: |
|
| a) Less than Rs.25,00,000 / - |
500 |
| b) Rs.25 lacs or more but less than Rs.5
crores |
1000 |
| c) Rs.5 crores or more. |
2000 |
3. The rate of interest proposed on the loan should not be less than
the four percent above the prevailing bank rate being the standard rate made public under
sec 49 of the R.B.I Act,1934.
4. The quantum of loan along with other loans taken, if any , should
not exceed 25 times of gross salary drawn in the proceeding six months prior to making of
the application.
5. No guarantee commission shall be allowed to be paid to anyone in
respect of the proposals.
The application should be accompanied by the following documents:
6. The proposal should be approved at the meeting of the board. A
certified copy of resolution passed should be submitted indicating the proposal of the
company, terms and conditions, interest of the directors / relatives if any, clearly
specifying
the rate of interest chargeable,
the schedule and terms of repayment
the loan is not being made out of borrowed funds of the company
any other major or important condition having bearing on the loan /
financial position of the company.
7. Wherever required members’ specific approval be obtained for
proposal .The resolution along with explanatory statement should contain all the relevant
details as mentioned in point 6 above. A certified copy of the resolution along with
explanatory statement so passed should also be enclosed.
8. The proposal should be accompanied with the declaration that the
company has not defaulted in making repayments to the investors the amounts as and when
they become due to them.
9. Certified copy of the Memorandum & Articles of Association of
Applicant Company.
10. Shareholding pattern of the companies (applicant & borrower),
common interest and controlling interest should specially state the interest of director
along with his/her relative. (for Sec372A applications)
11. List of Directors of the Board of both the companies (applicant
& borrower companies wherever applicable) and disclosing inter-se interest, if any.
12. Financial position and net worth of both the companies for three
years along with copies of annual reports.
13. Certified copy of draft loan agreement.
14. If the loan is backed by any guarantees, then the name and
particulars of the grantors with their consent.
15. Details of the loan given / corporate guarantee given or security
provided to any company / person / firm etc so far along with proof of compliance of
Sec372A, wherever applicable should also be furnished.
16. Details of the loan given / corporate guarantee given or security
provided to any company / person / firm etc so far under Sec.295, details thereof should
be provided.
17. Company should give a declaration to the effect that funds proposed
to be loaned are not required for its working capital requirements at least for a year.
18. A certified copy of the loan scheme for the employees of the
company, if any.
19. Justification for quantum of loan / guarantee or furnishing
security by the company.
20. In respect of all proposals, a certificate from the statutory
auditors or a company secretary in whole–time practice to the following effect be
enclosed stating therein that
the proposal is in conformity within the provisions of Section 372A
of the Companies Act, 1956.
the company has not defaulted in
the repayment of any Fixed deposits accepted by the company under
Section 58 A of the Companies Act, 1956 or part thereof or interest thereon
Payment of dividend
Redemption / repayment of debenture and timely payment of interest
thereon
Redemption preference shares and
the Company is regular in filing all forms / returns as required to
be filed under the Companies Act 1956.
21. A NOC / prior approval of public financial institutions / banks in
case any term loan is subsisting.
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