30 July 2012
what are the compliances that are to be complied with in case of unlisted public company and private company makes loan or advances or take loan from director or related company or individuals
In brief, a transaction of a Loan given to director/related cos or loan accepted, by public co/ pvt cos
the main section that has to be kept in mind is Section 295 of the companies Act.(in case of public co)
Further compliance requiremtns could come under Sec 372A of the Companies Act (in case of public cos)
Also, in the point of view of the director, care should be taken to see if application of Section 2(22)(e) of the Income tax is attracted.
Additional points to be considered is applicablity of Sections 269SS and 269 T of the income tax act(in case loan is given in cash in excess of Rs 20000).
For reporting purposes, care should be given to consider the requirements of Accounting Standard 18
If you are paying interest on the loan, consider the applicability of Sec 40A(2) of the Income Tax Act on such interest(whether the rate is unreasonable or not)
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