Loan to pvt company by ltd company

Application of Sec 295 of the Companies Act, 1956

Case 1 : Loan by Ltd Co. to Pvt Com (not being Subsidiary) - applicable.

Case 2 : Loan by Ltd Co. to Pvt Com (being Subsidiary*) - NOT applicable.

* so in case of Ltd company being Shareholder of Pvt Co. Sec 295 will apply if holding is 50% or less.

Sec.295 says without obtaining the previous approval of the Central Government in that behalf shall, directly or indirectly, make any loan to, or give any guarantee or provide any security in connection with a loan made by any other person to, or to any other person by 

(C)any private company of which any such director is a director or member.

So here ltd co with out approval of CG cant make loan or othewise if made director has to vacate u/s 283

After compliance of sec.295 , Here Sec.372 A will  also be applicable. As sec says no company  can give directly or indirectly loan to any other body corporate, 

1.Exceeding its 60% of (PUC+Reserves)

or 2. Exceeding its 100% of free Reserves which ever is more

and with out special resolution passed by ltd co.

Originally posted by : Chiradeep.R.H
	Sec.295 says without obtaining the previous approval of the Central Government in that behalf shall, directly or indirectly, make any loan to, or give any guarantee or provide any security in connection with a loan made by any other person to, or to any other person by  (C)any private company of which any such director is a director or member.   So here ltd co with out approval of CG cant make loan or othewise if made director has to vacate u/s 283 After compliance of sec.295 , Here Sec.372 A will  also be applicable. As sec says no company  can give directly or indirectly loan to any other body corporate,  1.Exceeding its 60% of (PUC+Reserves) or 2. Exceeding its 100% of free Reserves which ever is more and with out special resolution passed by ltd co.

AGREED                      

Originally posted by : Chiradeep.R.H
	Sec.295 says without obtaining the previous approval of the Central Government in that behalf shall, directly or indirectly, make any loan to, or give any guarantee or provide any security in connection with a loan made by any other person to, or to any other person by  (C)any private company of which any such director is a director or member.   So here ltd co with out approval of CG cant make loan or othewise if made director has to vacate u/s 283 After compliance of sec.295 , Here Sec.372 A will  also be applicable. As sec says no company  can give directly or indirectly loan to any other body corporate,  1.Exceeding its 60% of (PUC+Reserves) or 2. Exceeding its 100% of free Reserves which ever is more and with out special resolution passed by ltd co.

AGREED                      

yes i agree with arvind and chiradeep

we are unlisted public lted co. we have given guarantee of loan to a LLP where all the three directors are designated parteners. will it come under the scope of section 295? if yes, what is the procedure for compliance of the same ?