UNSECURED LOAN BY PRIVATE LIMITED COMPANY TO RELATED PARTIES

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Hemkumar

Hemkumar (Querist)
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03 January 2024 Can a private limited company give unsecured loans to its directors and other related directors

RAJA P M

RAJA P M (Expert)
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03 January 2024 No... Company can't give loan to directors, (Related Directors) Share holders and Other related parties...

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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20 January 2024 Seems like a Company can provide loan, guarantee or security without any restrictions under following cases:

a. Given to Managing Director or Whole time Director » as a part of the conditions of service extended by the company to all its employees;

or » pursuant to any scheme approved by the members by a special resolution; or

b. Company providing loan in the ordinary course of business activity.

https://taxguru.in/company-law/company-give-loans-directors-relatives.html#google_vignette

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RAJA P M

RAJA P M (Expert)
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20 January 2024 Pvt Ltd company can receive loan from Directors, Shareholders. but, company can't give loan to it's directors, shareholders...