Agreed with expert! Provisions of section 295 of the Companies Act, 1956 are not applicable to an indpendent Private Company i.e. a Company which is not a subsidiary of a Public Company......
24 November 2010
Yes no problem in giving loan to an Individual or Directors of the Pvt Ltd co which is not a subsidiary of a Ltd Co. section 295 is applicable to a public company or a private company, which is a subsidiary of a public company.
30 November 2010
I am agreed with the above replies of all experts. But, if pvt. ltd. co. gives loan to its member then it can be treated as deemed dividend u/s 2(22)(e) of the Income Tax act, 1961 and the company will also have to deduct TDS on it u/s 194 of the said Act. But. if it is a loss making company and do not have accumulated profits then these provisions will not be applicable.
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