Legal Question in Banking Law in India

Banking

what precautions are required to be taken by a Bank when the Borrower company which is a pvt ltd company is converted into public limited company


Asked on 3/26/08, 7:32 am

3 Answers from Attorneys
Homi Maratha N.N. Maratha & Co.-Advocates

Re: Banking

You must take a advice from the lenders lawyer.

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Answered on 3/27/08, 5:58 am
Aniruddha Pawse Aniruddha.P.Pawse Advocates

Re: Banking

You can ask the question to your Bank Manager as he will in better position to reply .

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Answered on 3/27/08, 8:28 am
J. Radhakrishnan independent Practice

Re: Banking

If the borrowing amount is more than the paid up capital and reserves, the public co. should be asked to have the loan approved by the general body. It is also advisable to get a confirmation of the existing charges and have the same registered under Sec.125 of the Companies Act. The company should also address a letter that notwithstanding conversion of it from private to public all loan documents executed and all securities created and in existence would hold good and current as if the public company (described in its present name) is substituted for the private company. It is advisable to seek specific advice on the facts of the case from the lender's lawyer.

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Answered on 3/26/08, 9:03 pm


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