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loan to shareholder

This query is : Resolved 
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(Querist)
27 January 2011 hello experts
are there any restriction for giving loan to shareholder of public limited company or to shareholder of private limited company?
plz tell me legal provision under companies act,1956.
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CA Sanat Pyne

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CA Sanat Pyne (Expert)
10 February 2011

CHECK THE SHAREHOLDING OF THE DIRECTOR/SHAREHOLDER. IF IT IS MORE THEN 10% AVOID GIVING LOAN AS THE SAME CAN COME WITHIN THE PERVIEW OF SEC.2(22)(e) i.e. Deemed Dividend.

For public limited company
see section 295(2)(a)(i).
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