A holding company provided interest free loan to its WOS B. Under section 372A the said transaction is exempt as the section doesn't apply to loan made by holding company to its wos. 372A (8) (c).
Directors of A are also director and member of B. How to comply section 297 and what entry need to be passed under Reg 301(1).
Section 297 applies only to sale, purchase or supply of any goods, materials or services.
Providing loans does not fall within the scope of this section and hence not applicable.
Thanks for clarification.
But providing loan is not a service??? and What about entry in register u/s 301(1), cause section 299 is applicable here.
Regards
However sections 299 and 301 will be applicable as they cover all contracts or arrangements in which directors are concerned or interested directly or indirectly . however only if the shareholding of the director is more than 2% of the paid up share capital in the other company.
| Originally posted by : Jayashree S Iyer | ||
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However sections 299 and 301 will be applicable as they cover all contracts or arrangements in which directors are concerned or interested directly or indirectly . however only if the shareholding of the director is more than 2% of the paid up share capital in the other company. |
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Agreed with expert Jayshree Mam!
Providing loan is not a service.
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