Loan to Director(Brief) 1- No company shall provide advance any loan, including any loan represented by book debts, give any guarantee etc to its directors or to any other person in which the directors is/ are interested. 2- The followings are not applicable:- :- the giving of any loan to managing director or whole time director by way of service provider as an employee of the company or any scheme as approved by the member through Special Resolution. 3- A company may provide loan, give guarantee in ordinary course of business to its director or any other person to whom directors are interested etc, it shall be provided with interest as per Reserve Bank of India. 4- The definition “to any other person to whom director is interested” menas (a) any director of the lending company, or of a company which is its holding company or any partner or relative of any such director; (b) any firm in which any such director or relative is a partner; (c) any private company of which any such director is a director or member; (d) any body corporate at a general meeting of which not less than twenty five per cent. of the total voting power may be exercised or controlled by any such director, or by two or more such directors, together; or (e) any body corporate, the Board of directors, managing director or manager, whereof is accustomed to act in accordance with the directions or instructions of the Board, or of any director or directors, of the lending company. 5- In case the default has been occurred in this section, the company shall be punished with minimum Rs. 5 lacs but it shall be extended up to Rs. 25 lacs and the loan or advance as given to the directors or person shall be taken, and in respect of default a imprisonment for a term which is extended up to Six months or fine minimum Rs. 5 lacs but it shall extended up to Rs. 25 lacs or both. (Clause 185 of New Company Bill 2012 ) Note: - all information (sentences, phrases and words) which is being provided or provided here either in past or future, is just for the purpose of “KNOWLEDGE and AWARENESS” not any other purpose
Posted on: Mon, 17 Jun 2013 01:06:53 +0000
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