loan made by one company to another under the same managemen

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

04 June 2011 there are two private companies in which directors are same and one company want to make loan to another,then what compliances are required to be fulfilled in this respect.

prasad

prasad (Expert)
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04 June 2011 Such transactions shall be approved by the General Body of both the companies. Such transactions fall u/s 297. These transactions shall be noted in the register maintained u/s 301. And shall be reported in the annual accounts.

CA Sumat Singhal

CA Sumat Singhal (Expert)
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06 June 2011 It should be noted that sec 295 would be applicable in case loan is given by a company to another pvt company in which director of first company is director or member of other company. As a result prior approval of CG shall have to be taken for such loan...
I think sec 297 have no role in thisregard....
Refer sec 295, 283, etc
Sumat Singhal

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CA Sumat Singhal

CA Sumat Singhal (Expert)
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Querist : Anonymous

Querist : Anonymous (Querist)

15 July 2011 thanks prasad and Sumit,I alos think that sec 297 has no role in this matter but as per section 295, it is mentioned that sec 295 shall not apply to any loan made by a pvt co unless it is subsidiary oF PUBLIC CO and in my query a pvt co give loan to a pvt co so i think that only Board's approval is required in this matter, section 372A also not applicable on pvt co.