section 299 of the companies act

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 July 2010 Dear Sirs
Section 295 and 372A of the Companies act does not applicable to a private companies.

So , my question is , in case of laon to directors or to his relatives or incase of inter corporate loans made by a private company , does it fall with in the scope of Section 299 of the Act,because scope of 299 is very wide and it covers all types of contracts. As there is no specific section deals with those transaction to a private company u/s 295 or 372A , will it fall u/s 199.
Pl. clarify my doubts

With regards

Ankur Garg

Ankur Garg (Expert)
Follow

07 July 2010 As per my suggestion analyse the applicability of section 299 to your case separately. I mean do not check section 299 in the context of section 295 or 372A.

Simply check whether director is interested in the transaction or not. If he is interested then follow section 299.

If company is giving loan to a director then he must disclose his interest to the entire board u/s 299 also put the same in board minutes.

Also make desired entry in the register maintained u/s 301.

Wait for other valuable opinions.

Thanks

Querist : Anonymous

Querist : Anonymous (Querist)

07 July 2010 Dear Ankur Sir
Section 299 is automatically invoke , as section 295 says about loan to director or his relatives and also incase of 372A also generally a private company finaces within its close circle(i.e group) .So pl. put your opinion whether sction 299 is applicable in this case ( i.e laon or advance made )

Querist : Anonymous

Querist : Anonymous (Querist)

Ankur Garg

Ankur Garg (Expert)
Follow

07 July 2010 As suggested earlier the director must disclose his interest in the transaction (Loan to director) in the board meeting u/s 299.

Section 299 is applicable because company is providing loan to its director. So according to me director must be considered interested in the transaction.

Regards

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