if 2 or more shareholders of the company hold in aggregate (not individually) more than 20% shares of the other company, sec 2(22)(e) would be applicable?
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sec 2(22)(e)
Replies (3)
We will not see it collectively,
See Individual Holdings on the date of Loan.. If the Person Company is Giving loan to is holding more than 10 %, Sec 2(22)(e) will be hit...
Sec 2(22) (e) will not applicable in this case. Since it is not a shareholder who provide a loan to another company. It is only the directors of the company. Eventhough share holder are the directors of the company, the company (private) is prohibited to accept deposits or loans.
The requirement for attracting Section 2(22)(e) are that a person must have 20% of "Voting power" and not mere share holding alone. Even if someone doesn't hold 20% share by himself but has voting power in respect of shares exceeding 20%, then deemed dividend arises.
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