Legal Question in Business Law in India

Hi, One of our family friends has recently started a management consultancy business. They do not own a flat in mumbai and hence they are using our flat as the registered address of their company. Its LLP registered with the MCA. We have given authorization to use our address as the registered address for their company. The question is do our friend or his company get any legal bounding on our flat? If the company gets into some financial problem, will our flat be taken for any legal actions? Our flat is on loan and we are currently paying EMI. Will there be any impact. Please clarify.


Asked on 3/02/16, 8:06 pm

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

03.03.2016

Dear Sir / Madam,

Yes, there is an impact. The arrangement and agreement between you and the family friend and the clauses incorporated therein comes into play here to determine the risks involved. At the time of availing any type of loan from the Bank, a loan pre-verification process by the Bank is mandatory prior to sanction of the loan, which includes a clause and condition regarding the Owner's approval to grant of the loan. If you consent to any loan application proposal of the family friend as a joint holder or guarantor, you are a surety and hence you are indirectly pledging your flat as a security towards the loan availed by your family friend.

Regards,

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Answered on 3/02/16, 9:08 pm


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