An exception to the rule that no company can provide financial assistance for purchase or subscripti......

Companies Act-Phase (I & II) Share capital and debentures Add to Study Deck

An exception to the rule that no company can provide financial assistance for purchase or subscription of its own shares is-

Financial assistance is by a banking company in ordinary course of business

Financial assistance is given at an higher rate of interest

Financial assistance is given to the related parties at an higher interest rate

Financial assistance can be given to Board of directors to control the minority interest.

Explanation:

Banking company can give Financial assistance in its ordinary course of business at an arm length interest rate.

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