13 March 2015
Respected sir, we have one propritorship firm and also pvt ltd co. the propritor of propritorship is also director of pvt ltd company. so we have done no of transaction through banks between both. so i want asked , can we take the loan or advance from propritorship firm to pvt ltd co, or from pvt ltd co to propritorship firm through bank
13 March 2015
Please refer Section 185 of the Companies Act, 2013 which provides that no company shall, directly or indirectly, advance any loan to any director or any other person in whom the director is interested, or give any guarantee or provide any security in connection with a loan taken by any other person in whom the director is interested. The restriction is also applicable to private companies. So loan can not be given to proprietorship firm as proprietor is also a director in the Pvt Ltd company.
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