Dear All,
Can anybody tell me that whether a company can give loan to individuals or not?? Please note I am not talking about NBFC's.
Kindly treat as urgent.
Regards,
Priti
Anand
(Chartred Accountant)
(435 Points)
Replied 22 June 2010
Yes a company can grant loan to any individual but there are certain restrictions under section 372A applicable only to public companies in respect of inter corporate loans.
Priti
(Company Secretary)
(96 Points)
Replied 22 June 2010
Hi Anand,
I am looking for provisions relating to granting of loans to individuals and Sec 372A governs provisions relating to Inter Corporate loans and Investments. So can you tell me which sub section or clause are you talking about which restricts the power of granting loans to individuals under section 372A.
Regards,
Priti
Mitali Agarwal
(Company Secretary)
(638 Points)
Replied 22 June 2010
| Originally posted by : Priti Bharech | ||
 |
Dear All, Can anybody tell me that whether a company can give loan to individuals or not?? Please note I am not talking about NBFC's. Kindly treat as urgent. Regards, Priti |
 |
Hello Priti,
A public company is required to follow the provisions of Section 295 while giving loan to Director or his relatives.
However, it can give loan to third party.
Views of other members are solicited.
Priti
(Company Secretary)
(96 Points)
Replied 22 June 2010
Dear All,
Thanks for the reply. My main focus is on loan given by companies to individuals other than the Directors.
So can anyone emphasise on this in particular.
Regards,
Priti
Rasesh
(CS CWA MBA (Fin) B.Com LL.B (Spl))
(6501 Points)
Replied 22 June 2010
Loans can be given to individuals. The rate of interest and terms of the loans should not be prejudicial to the interest of the Company. There is no restriction on loans to individuals - be it employees or other vendors etc.
Rasesh
(CS CWA MBA (Fin) B.Com LL.B (Spl))
(6501 Points)
Replied 22 June 2010
The Company, however, should not start lending as a seperate line of business unless it has the necessary permissions from RBI and the MOA is amended.
Priti
(Company Secretary)
(96 Points)
Replied 22 June 2010
Thanks for the reply.
Can you please tell me where is it exactly mentioned that there is no restriction on companies giving loans to individuals. I mean any section that specifically refers to the same.
Rasesh
(CS CWA MBA (Fin) B.Com LL.B (Spl))
(6501 Points)
Replied 22 June 2010
There is no provision in the act, which specifically allows or disallows giving loans to individuals.
CA Suri Kota
(Assistant Manager @ EY)
(955 Points)
Replied 22 June 2010
I agree with Mr Raseh. ....It is neither restricted nor specified in the Companies Act when it comes to the matter of granting loans to individulas like employees.
varun gupta
(Senior Accounts Officer)
(89 Points)
Replied 23 June 2010
ya company can give loan to individual, iam working in public limited company and we give loans to our employees, so absolutely answer is yes
Priti
(Company Secretary)
(96 Points)
Replied 23 June 2010
Thank you all for your replies.
Regards,
Priti
hyponkshe
(chartered accountants)
(73 Points)
Replied 24 June 2010
the company can give loans to individuals without any restrictions
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