Whether a loan taken by a Company from director's relative would amount to services under Section 297?
Please advise.
7 Replies
Ashish Gupta
(CS & Legal)
(114 Points)
Replied 30 June 2010
In what ways u are seeing loan taken from director's relative as a service?
Preeti Gandhi
(Company Secretary)
(90 Points)
Replied 30 June 2010
In Ramaiya under Section 297 services are deemed to include financial, Banking services. Our Auditor is insisting for a CG approval as the paid up capital of the Company is above 5 crore.
Preeti Gandhi
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 30 June 2010
A single loan taken from director's relative cannot be considered as a service provided by director's relative. Hence outside the preview of section 297. Service is something done on a regular basis.
Wait for other opinions. Thanks
vivek
(CS)
(751 Points)
Replied 30 June 2010
Completely agree with Ankur Sir,
My point of view is- if director's relative is individual and providing loan is not his business it will not amount to loan but if it has been taken from a NBFC run by a Director's relative then it will mount to service.
Regards
Ashish Gupta
(CS & Legal)
(114 Points)
Replied 30 June 2010
I agree.
Taking a Loan from Director's Relative will not tentamount to any kind of services, unless the director's relative carries out such operations of financial assistance on regular basis.
A one off transaction will not attract 297.
Rgds,
Ashish
neha AWASTHI
(hh)
(230 Points)
Replied 01 July 2010
Section 297 talks about the board approval in certain contracts in which particular director are interested,contracts for purchase, sale or services, but one time loan given by director s orr their relatives are not covered under the head services, unless untill its their business to provide loans and financial assistance orr its a finance Co, in which director orr their relative are partners
kajal
(Company Secretary)
(28 Points)
Replied 23 March 2011
Loan taken by the listed co. from its director's relative is goverened by which section and what is the limit?
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