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. Can a firm hold/purchase the shares of a private ltd in the above case.
2---Further the relative firm as above is holding few shares less then 2% of the above private limited company. Will it make any difference as loan given or received as to a share holder firm or company.
Private Limited company barred from short-term loans to related firms with common directors; shareholding under 2% irrelevant. A query was raised regarding whether a Private Limited company can provide a short-term loan with interest to a related firm that shares common directors and partners, and if such a firm can hold or purchase shares of the Private Limited company. Additionally, it was questioned if the firm holding less than 2% of the company's shares affects the legality of the loan. The response provided was that, in the respondent's view, such an arrangement is not permissible. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
