Flat purchase

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 December 2012 I am working in a Pvt. Ltd. Co.My CEO(85% shares) wants to purchase a flat worth rs.5.25 crores and for that he wants to give 30% i.e. Rs.1.50crores in cash,rest amount would b financed for which 20%DP i.e.70 lakhs to b paid.My CEO want to withdraw 1.5+.70 crores from CO.My CO. enjoying CC limit for working capital.How it can be done?

CS, Deepak Pratap Singh

CS, Deepak Pratap Singh (Expert)
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25 December 2012 Dear Friend,Section 295 of the Companies Act, 1956 clearly provide that any loan, advance, gurantee or other benefit provided to any director having substantial interest in the company is subject to approval of Shareholders as well as Central Government. But in case of a private company that provisions are not applicable. You have to take care of Deemed Dividend provisions of Income Tax Act, 1961. The loan to your CEO from working capital loan is subject to approval of financial institution. Please check the details.

Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2013 but my company enjoying cc limit...would bank allow loan to director???

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