Loan from director
This query is : Resolved
Anurag Sharma
(Querist)
20 May 2016
A Listed Company took a loan from its Director through another Private Company in which he is also a director. Is this transaction comes into related party transaction? Please also refer the relating law.
Thanks in advance.
Thanks in advance.
Jatin Bajaj
(Expert)
20 May 2016
No , it is not the related party Transaction. Tough it is covered under the definition of section 2(76) of the Companies Act 2013, which defines related party, but Such a transaction are not covered under section 188(1), which describes the related party Transaction. So taking loan from the director, which is also the director of the Company will not come under the purview of section 188(1).Hence it is not the related Party Transaction
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