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SECTION 295

Ameet (L) (1678 Points)

02 June 2010

CAN ANYONE CAN GUID ME IN FOLLOWING AREAS ?

1) WHAT IS THE LOAN GIVEN TO DIRECTOR BEFORE THE COMPANY CONVERTED IN TO PUBLIC AND THIS AMOUNT IS OUTSTANDING ?

2) WHAT IS THE LOAN GIVEN TO DIRECTOR BEFORE THE COMPANY CONVERTED IN TO PUBLIC AND THIS AMOUNT IS NOT OUTSTANDING ?

3) WHT IS LOAN GIVEN TO DIRECTOR DURING THE YEAR AFTER CONVERTED IN TO PUBLIC CO. BUT NO OUTSTANDING AT YEAR END.

4) KINDLY EXPLAIN THE MAXIMUM AMOUNT OF HOUSING LOAN LOAN AND CONDITION FOR HOUSING LOAN GIVEN TO DIRECTOR. ?

5) WHAT WILL BE THE INTEREST RATE FOR HOUSING LOAN ?

IT WILL BE BETTER IF YOU MENTION THE CLAUSE OF SECTION AND SUPPORTING REFERENCE.

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3 Replies

Amir (Learner) (4016 Points)
Replied 02 June 2010

Dear Ameet,

Sec 295 does not have retrospective effect...

Therefore, if Loan was granted by a Pvt. Ltd., which later on converted into Public Co., Sec 295 is not required to be complied with.

The charging event for sec 295 is the "Grant of loan' and hence all conditions should be fulfilled at this time only to attract Sec 295.

The fact that whether the loan was oustanding or not as on year end is not relevant. Further the loan may or may not carry interest.

Regarding ur Housing loan doubts - I am not sure what u are trying to ask but will depend upon organizational polices...

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CA Sandeep Thakur (Managment Trainee) (188 Points)
Replied 02 June 2010

CAN ANYONE CAN GUID ME IN FOLLOWING AREAS ?

1) WHAT IS THE LOAN GIVEN TO DIRECTOR BEFORE THE COMPANY CONVERTED IN TO PUBLIC AND THIS AMOUNT IS OUTSTANDING ?

2) WHAT IS THE LOAN GIVEN TO DIRECTOR BEFORE THE COMPANY CONVERTED IN TO PUBLIC AND THIS AMOUNT IS NOT OUTSTANDING ?

3) WHT IS LOAN GIVEN TO DIRECTOR DURING THE YEAR AFTER CONVERTED IN TO PUBLIC CO. BUT NO OUTSTANDING AT YEAR END.

4) KINDLY EXPLAIN THE MAXIMUM AMOUNT OF HOUSING LOAN LOAN AND CONDITION FOR HOUSING LOAN GIVEN TO DIRECTOR. ?

5) WHAT WILL BE THE INTEREST RATE FOR HOUSING LOAN ?

IT WILL BE BETTER IF YOU MENTION THE CLAUSE OF SECTION AND SUPPORTING REFERENCE

Hi firstly I would lyk to inform that section 295 does not embark upon the outstanding and liablty in respect of loan as on of balance sheet date.

Reply 1 The section 295 is applied to only the public company and the public company is only liable to contravention of section 295 only if the at the time of making the loan the company is a public limited company .

Reply 2 The section 295 has no retrospective effect and hence the loan given and subsequently the private company (as the section 295 does not apply to private company )is converted into the public company has no impication and consequences.

Reply 3 same as above

Reply4 The housing loan given to director is not falled in the ambit of section 295.

Reply 5: The interest on loan must not be prejudicial to the interest of company and the rate should as prevailing in the market.

Regards

Sandeep Thakur