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Private Company restrictions prohibitions

Private Company restrictions prohibitions

The Private compant restrictions and prohibitions are stated as below for different cases:

1.In case of Loans and Investments

Private Company restrictions prohibitions in case of Loans and Investments Excepting that of loan to directors a private company cannot provide loan or advance to its members. The provisions of Section 372A relating to inter-corporate loans and investments are not applicable to a private company.

2.In case of Finance, Accounts and Audit

Private Company restrictions prohibitions in case of Finance and Accounts are Proper books of accounts shall be kept.Internal audit need not be carried out and auditor’s report shall be subject to the provisions as specified in section 227. A private company has no restriction for making donations or subscription and it can contribute donation to political party or purpose as specified in section 293A.

Private Company restrictions prohibitions

3.In case of Penalties

Penalties for contravention of the applicable provisions is specified in appropriate sections.

4.In case of Amalgamation, Merger or Division

Private Company restrictions prohibitions in case of Amalgamation, Merger or Division.The Court has the jurisdiction over the matter.

5.In case of Resolution of Disputes

The resolution of disputes (oppression and mis-management are handled by the Company Law Board under sections 397, 398 and 399 of the Companies Act, 1956.

Private Company restrictions prohibitions

6.In case of Miscellaneous Provisions

Striking of name of company are generally regulated by section 560 or any other scheme as may be notified by the Central Government. There is no provision which specifies that the provisions relating to private company shall have an overriding effect over any other Act or law for the time being inforce.

7.In case of Reconversion of Companies

Re conversion is possible by converting a public company into a private company and vice-versa.

With regards,

Thank You.

Private Company restrictions prohibitions

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 Private Company restrictions prohibitions

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