19 October 2013
AS PER SEC.295(2) NO APPROVAL REQUIRED FOR GIVING A LOAN TO DIRECTOR, THAN MEANS A DIRECTOR CAN WITHDRAW A LOAN FROM PVT LTD WITHOUT ANY LIMIT OR ANY RESTRICTION.
IF ANY LIMIT OR RESTRICTION PLEASE DESCRIBE LIMIT & SECTIONS ALSO.
Section 295 put restrictions on a public company or a private company being a subsidiary of a public company intending to make any type of transaction with a director of the company or partner or relative of a director, etc. whether, directly or indirectly to make any loan, or to give any guarantee, or to provide any security in connection with a loan made by any other person to, or to any other person by, and it calls for obtaining the previous approval of the Central Government.
This section is applicable to a public company or a private company, which is a subsidiary of a public company. So Pvt Ltd Co. can extend the loan.
CAclubindia
