Guarantee given by Foreign Holding Company for its Indian sub. Co

    Posted By : Damini / Published on : 18-Aug-2020 01:07 PM / View : 23 / Comment : 0
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    It may appear like an Unsecured loan as no charge on the assets of the company, but giving Guarantee from Foreign Holding company for loan is secured to the bank . In case of default , Holding Co will have to pay to the foreign bank on its behalf, and in turn it can claim the payment from subsidiary Indian company; Also find out any counter guarantee or agreement between them.in this respect and its registration.It is Secured Loan, backed by such Guarantee, to the bank .In short , it is secured loan to the Subsidiary Co also. So to avoid it as a .................case, comply the law :

    Under FEMA , the Indian Company has to obtain prior RBI permission for getting such guarantee [contingent liability - obligation to pay to the Holding Co against such guarantee.in future]. . Then file the charges with ROC.under the Cos Act.
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