A group company intends to apply for debentures in another group company. Both are public limited companies. Are debentures treated equivalent to loan for the purpose of Section 295 of the Companies Act, 1956?
Manish (Senior Manager (CS & Legal)) (32 Points)
21 March 2012A group company intends to apply for debentures in another group company. Both are public limited companies. Are debentures treated equivalent to loan for the purpose of Section 295 of the Companies Act, 1956?
Giridhar S Karandikar
(Team Lead)
(7543 Points)
Replied 22 March 2012
Section 295 gets attracted only if the loans are given to directors of the co. If the loan transactin is between two companies, then the provisions of Sec295 do not get attracted.
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