Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
27 February 2013Friends
What is the position if a public limitd company wants to give advance to a Director. Does it attract section 295. The section, you all are aware of, deals with loan. Will the nature of advance be examined by Regulatory authorities in such a case.
Please enlighten.
Regards,
Devendra
(Chartered Accountant)
(4775 Points)
Replied 27 February 2013
According to Section 295 of the COmpanies Act, 1956, if a Public Company wants to give Loan / advance to Director, then the Public Co. has to obtain prior approval of the Central Government.
Here are certain requirements to be followed, to obtain approval from CENTRAL GOVERNMENT. That means, before applying for the approval, company needs to make sure that these all requirements are followed. Few examples are given below, i.e. what all information a company should provide to get approval from government:
Regards,
Devendra Kulkarni
CAclubindia
