Applicability of section 295

This query is : Resolved

Gourav Mehta (Querist)
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23 August 2013 Dear Friends

Please provide guidance for applicability / violation of section 295 of Companies Act on the below transactions entered into by a closely held Public Limited Company with its Directors:

1. Company has paid advance salary for 3 months to its Directors.

2. Company has paid 3 month's advance rent to its director's for the office premises taken on lease from the director's.

Whether the above transactions comes under the purview of loans to director's under section 295.

Thanks

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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23 August 2013 1.Advance salary is not a loan as per sec 295.
2.no.

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Ajay Mishra

Ajay Mishra (Expert)
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23 August 2013 Hi

Agreed with Expert,

The below article will also help you.

https://www.caclubindia.com/articles/section-295-of-companies-act-1956-15178.asp#.Uhc09xenyVE

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