Section 295
This query is : Resolved
30 November 2010
Hi...
A company ABC Ltd. has 3 Directors A,B,and C. Now, Mr.D is a relative of Mr. A.If we propose to give a loan to Mr.D then the provisions of section 295 have to be complied with.
XYZ Ltd. is a holding company of ABC Ltd. Mr. R is a relative of Mr. X who is a Director in XYZ Ltd. If Mr. R apporaches the Company ABC Ltd. for a loan of Rs.50 Crores, then whether provisions of section 295 ofthe Act are applicable?
To summarise, whether the provisions of section 295 get attracted and will have to be complied with in case the Company proposes to give a loan to a person who is a relative of a Director of its Holding Company??????? Pl. clarify its urgent???????
A company ABC Ltd. has 3 Directors A,B,and C. Now, Mr.D is a relative of Mr. A.If we propose to give a loan to Mr.D then the provisions of section 295 have to be complied with.
XYZ Ltd. is a holding company of ABC Ltd. Mr. R is a relative of Mr. X who is a Director in XYZ Ltd. If Mr. R apporaches the Company ABC Ltd. for a loan of Rs.50 Crores, then whether provisions of section 295 ofthe Act are applicable?
To summarise, whether the provisions of section 295 get attracted and will have to be complied with in case the Company proposes to give a loan to a person who is a relative of a Director of its Holding Company??????? Pl. clarify its urgent???????
30 November 2010
Hi,
It is not possible to give loan to Mr. R without CG's approval bcoz section 295 is applicable in the given case. As per my interpretation of section 295(1)(a) this clause includes the following persons:
1. Director of Lending company
2. Director of Lending company's Holding company
Both the above 2 comes under the word "such" being used in clause (a) of section 295(1).
3. Any partner or ralative of such director.
So your case is falling under point 3 above. Mr. R is relative of such director covered under point 2 above.
Thank you
It is not possible to give loan to Mr. R without CG's approval bcoz section 295 is applicable in the given case. As per my interpretation of section 295(1)(a) this clause includes the following persons:
1. Director of Lending company
2. Director of Lending company's Holding company
Both the above 2 comes under the word "such" being used in clause (a) of section 295(1).
3. Any partner or ralative of such director.
So your case is falling under point 3 above. Mr. R is relative of such director covered under point 2 above.
Thank you
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- ITC temporary reversal and reclaim
- Inventory of finished goods
- Applicable TDS rate for sale of property in Nov 2024
- Confusion around Form 26QB fields
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Tds on building rent monthly
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- Quiery in relation to GST liability in case of an advocate who has obtained GST registration.
- RCM INVOICING FROM NOV-2024
- TDS under section and rate of TDS
- GST input on scooter purchased
- TDS under section 194Q and TCS under section 206C
- GST input on car insurance and repairs
- GST input on Diwali gift to employee
- GST input on Mobile Handset
- Material and freight in same invoice
- TDS under section 194J inclusive of reimbursement of expenses
- TDS on Material and Labour in same invoice
- Should I be worried about and rectify reporting Jan,Feb ,March 2024 foreign salary in schedule FA?
Trending Online Classes
CAclubindia
