Law
This query is : Resolved
08 June 2013
loans to directors and vice verse in pvt and public company what is the procedure
Ajay Mishra
(Expert)
14 June 2013
Hi
Section 295 is applicable to a public company or a private company, which is a subsidiary of a public company. Therefore, a private company shall be exempted from the provisions of section 295 of the Act.
Following companies are exempted from provisions of section 295 and these companies can give loan to their directors without the approval of Central Government:
(a) Private Company which is not a subsidiary of public company;
(b) Banking Company;
(c) Government Company'
(d) Loan made by holding company to its subsidiary company;
(e) Guarantee given or security provided by holding company in respect of any loan made to its subsidiary company.
Section 295 is applicable to a public company or a private company, which is a subsidiary of a public company. Therefore, a private company shall be exempted from the provisions of section 295 of the Act.
Following companies are exempted from provisions of section 295 and these companies can give loan to their directors without the approval of Central Government:
(a) Private Company which is not a subsidiary of public company;
(b) Banking Company;
(c) Government Company'
(d) Loan made by holding company to its subsidiary company;
(e) Guarantee given or security provided by holding company in respect of any loan made to its subsidiary company.
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