Loan given by private co. to others

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PALLAVI SOMANI

PALLAVI SOMANI (Querist)
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08 September 2012 HEY FRIENDS.....

PLS LET ME KNW WHETHER PRIVATE CO. CAN GIVE LOANS TO OTHERS.....?

CA CS PRASHANT

CA CS PRASHANT (Expert)
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08 September 2012 Yes a private company can very well give loan to others..

Section 372A of companies act 1956 will be applicable if that other is a subsidiary of the main company.

CA AYUSH AGRAWAL

CA AYUSH AGRAWAL (Expert)
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08 September 2012 Can't Give to Share Holders Holding 10% of Shares in That Company, or Substantial Interest in That Firm, Otherwise Section 2(22)e of Income Tax Comes in Exist.

Also Any Loan Given to Related Party Require Disclosure as Per AS 18 Related Party Disclosure Issued by Our ICAI & Books Need to Maintain if CARO is Applicable.

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Guest

Guest (Expert)

08 September 2012 Before giving loan, we should avoid the applicability of deemed dividend u/s 2 (22) (e) as replied by ayush ji.