Hi,
According to Section 295(1)(e) of Companies Act--
"" No Company without obtaining the previous approval of Central Governments in that behalf, shall, make any loans to...... any Body corporate, the Board of Directors, Managing Director or Manager whereof is accustomed to act in accordance with the directions or instructions of the Board, or of any director, or directors, of the lending company.""
My query is what does the term "accustomed to act" mean?
whether it means majority of Board (more than 50%) should be common to fall within the perview of this section or
Only one single common director would attract the provisions of this section.
CAclubindia
