10 November 2011
I work in a company which is a private limited company and consists of 7 directors now out of this 2 directors have formed a partnership firm. Can our private limited company give loan to the partnership firm. This loan amount will be utilized by the partnership firm to purchase land.
Kindly advise 1. Can the company provide such loan? 2. Which sections of the Companies Act, 1956 will be applicable? 3.Is there any section under which the company's directors are required to give disclosure? 4. Is resolution to be passed by BOD or EGM is required?
Thank you in anticipation. Kindly reply at the earliest.
10 November 2011
1. yes company can provide such loan by passing a board resolution. 2. Directors who are also partners should disclose their interest in the transaction in the board meeting u/s 299 of the company act 1956.
Simply board resolution is enough and same should be covered in board minutes.
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