Loans taken by director

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Atul Singh Yadav (Querist)
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09 February 2010 I would like to know. Can a director take a personal loan from some financial institution on his personal name and repay this loan from the Bank account of the company? If yes, then how will it be treated in the books of company?
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Can a director of public limited company give loan to the public limited co.? If Yes, What are the policy norms?

Ankur Garg

Ankur Garg (Expert)
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09 February 2010 Yes a director of public limited company can give loan to the public limited co.

For that purpose you have to pass a board resolution under section 292(1)(c).

Ankur Garg

Ankur Garg (Expert)
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09 February 2010 Regarding your first query I would suggest you to avoid repayment of director loan from company bank account as that would be equal to loan to director u/s 295 and you have to take CG approval for the same repayment.

Views of other experts solicited.

Best Regards

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