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Loan to proprietarship firm

Shefali Gupta (104 Points)

23 September 2022

can private company give loan to proprietarship firm where directors and partners are same?

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2 Replies

Eswar Reddy S (CFO- at NHTF) (58213 Points)
Replied 23 September 2022

If it is in the ordinary course of business then it is permissible

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Chirag (Professional) (1979 Points)
Replied 29 September 2022

Proprietorship doesn't have any separate legal identity,so in this case 185 will attract ....if it's partnership then approval from board and shareholder with complete disclosure of purpose ,and other procedural requirements of the section loan may be disbursed....lastly ,it's not applicable for NBFCs