Loan to a pvt. ltd. co.

This query is : Resolved

Deepak (Querist)
Follow

27 March 2012 Dear Friends/Experts

I would like to inquire if a Proprietorship firm in which one the co.'s Director has interest can extend loan to the company ? if Yes, Is there any limit to that?

Appreciate a quick response.

Thanks in Advance

HONEY AHUJA

HONEY AHUJA (Expert)
Follow

28 March 2012 No problem in that. Partnership firm in which the director has interest can't take loan from the Company u/s 295 but can give the loan to the Company. The Transaction will also be exempted under under section 297. Further 295 is not applicable on pvt. company.

Deepak

Deepak (Querist)
Follow

28 March 2012 Many Thanks Mr. Ahuja

This is of great help.

Regards
Deepak

Upgrade to CAclubindia Pro. Subscribe Now!