08-21-2009, 07:22 PM
Awais has done some good work but unfortunately he gorgot to mention here the Explanation to section 195 which states that Sub-section (1) shall not apply toâ
(a) any loan made, guarantee given or security providedâ
(i) by a private company, unless it is a subsidiary of a public
company; or
(ii) by a banking company;
The nutshell is that a director of a private limited company can withdraw / borrow form the company any amount he likes and that amount would be considered as dividend unless and ultill he refunds the same to the company.
Regards
(a) any loan made, guarantee given or security providedâ
(i) by a private company, unless it is a subsidiary of a public
company; or
(ii) by a banking company;
The nutshell is that a director of a private limited company can withdraw / borrow form the company any amount he likes and that amount would be considered as dividend unless and ultill he refunds the same to the company.
Regards