RAHUL MAHAJAN (CA) (166 Points)
06 January 2013My Query is: if a private company has taken a loan from a shareholder of Rs.30 lacs.
Can a Private comapny take a interest free loan from a shareholder?
Would such interest free loan by shareholder violate any provision of Companies and Income Tax Act?
Tanveer Md Masood
(Indispensable)
(361 Points)
Replied 06 January 2013
Dear Mr.Mahajan,
Interest free fundings is normally carried out between two subsidiaries or holding company with its sister or subsidiary company or between two associated enterprises where the transaction is carried out as part of international trade. Howver, as per sec.295 a public company should not give loan to its director without obtaiing prior approval of central government.
Morever, sec.372 reating to intercorporate loans and investment is also applicable.
CAclubindia
