27 January 2011
hello experts are there any restriction for giving loan to shareholder of public limited company or to shareholder of private limited company? plz tell me legal provision under companies act,1956.
CHECK THE SHAREHOLDING OF THE DIRECTOR/SHAREHOLDER. IF IT IS MORE THEN 10% AVOID GIVING LOAN AS THE SAME CAN COME WITHIN THE PERVIEW OF SEC.2(22)(e) i.e. Deemed Dividend.
For public limited company see section 295(2)(a)(i).
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