Property of a company

Save Share

Join Us Follow Us Add as Source

This query is : Resolved

Report Follow Query Ask a Query

Querist : Anonymous

Querist : Anonymous (Querist)

13 October 2012 property of a company given on rent to director cover under which section?

Ajay Mishra

Ajay Mishra (Expert)
Follow

13 October 2012 Hi

Section 295 of the Companies Act, 1956 prohibits a public company and a private company which is a subsidiary of a Public Company from making a loan to its Directors, etc. without prior approval of the Central Government. This Department has formulated guidelines for the grant of house building loans by such companies to their Managing Director/Whole-time Directors. The existing guidelines envisage grant of house building loan upto a ceiling of Rs. 5.00 lacs on payment of interest @ 10% per annum.

The Government has, therefore, decided to allow the companies to make house building loans to their Managing Director/Whole-time Directors without obtaining prior approval of the Central Government under section 295 of the Companies Act, 1956 on such terms and conditions as are applicable to its officers and employees. The approval of the Central Government will, however, be necessary in the case of companies having no such scheme or where the house building loan proposed to be made is not covered by the terms and conditions as are applicable to its officers and employees. (Press Note, dated 20-8-1993, reproduced hereunder)

Message likes : 1 times

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now