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Had anyone gone through any clause/ Rule in relation to exisiting loan to Director. Had any timelines to repay it been defined or this Section will not apply to exisiting loan?
My company (purely private company) had given loan to one of its Director 2yrs back which is otherwise repayable in July, 2014.
Thanks and regards
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Existing loans which were permissible under the Act then prevailing cannot be invalidated by subsequent amendment in law. However, you should take precaution to ensure that no new debit entry is made in the director's account which could be termed as fresh loan which will be covered under the new Act. Hence it would be advisable to pass general resolution under the new Act to avoid any unintentional contravention.
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