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Discussion Topic: “Statutory Defintions”
Discussion Questions:
Q1 Is it correct that a loan or an advance by a private
limited company to a shareholder of the company is
considered as payment of dividend? Explain your views.
Q2 Will a loan or advance by a private limited company
to its holding company be considered as payment of dividend
if the subsidiary possesses sufficient amount of
accumulated profits?
Answer Posted / Prashant Agnihotri
A statutory definition is a definition given to a term in a statute. In the context of Indian law, it refers to the meaning assigned to a term by an Act or a Regulation. In this discussion, we will discuss the correctness of a loan or advance being considered as payment of dividend and the conditions under which loans or advances by private limited companies to other entities may be considered as payment of dividends.
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