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of <h1>Companies Act Sec 295: Restrictions on loans to directors without government approval; penalties for violations.</h1> Section 295 of the Companies Act, 1956, restricts companies from making loans, providing guarantees, or offering securities to directors or related entities without prior approval from the Central Government. This includes directors of the company or its holding company, their relatives, or firms and companies in which they have significant control. Exceptions include loans and guarantees by private companies not subsidiaries of public companies, banking companies, and transactions between holding and subsidiary companies. Violations may result in fines or imprisonment, but repayment of loans can mitigate penalties. Joint and several liabilities apply to those knowingly involved in contraventions.
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