Loan by Private Limited to Firm

[DK AGGARWAL]

Dear Sir

Clarification-Company Law

1-Can a Private Limited company give short term LOAN on Interest to a relative firm having common Directors and Partners or vice versa

2---Further the relative firm is holding few shares of the above private limited company. Will it make any difference as loan given or received to a share holder firm or company?

Please respond

AI Summary

Private Company Cannot Loan with Interest to Related Firm with Shared Directors and Partners, Says Company Law A query was raised about whether a private limited company can provide a short-term loan with interest to a related firm that shares common directors and partners. Additionally, the inquiry questioned if the fact that the related firm holds shares in the private limited company affects the legality of the loan. The response provided was a straightforward 'No,' suggesting that such an arrangement may not be permissible under company law.