Can Pvt Ltd. co give intrest free loan to its director.
Pawan Singhal (chartered accountant) (655 Points)
12 August 2015Can Pvt Ltd. co give intrest free loan to its director.
Gautami D
(Assistant Company Secretary)
(32 Points)
Replied 12 August 2015
Section 185 i.e. Loan to directors - is not applicable to a private company -
a. In whose share capital not other body coprorate has invested any money;
b. If the borrowings of such a company from banks or financial institutions or any body corporate is less than twice of its paid up sharecapital or fifty crore rupees, whichever is lower; and
c. Such a company has no default in repayment of such borrowings subsisting at the time of making transactions under Section 185.
This exemption has been provided as per the notification dated 5 june 2015. If the above conditions are fulfilled then the private company can give interest free loan to director.
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