It happens many times when an agreement is signed between two parties and according to this agreement one out of two parties agrees to pay the debts and loans of the other party. In return to this favor provided by the party paying the loan for another, the second party has to agree upon the reimbursement of the amount at some later date but keeping this agreement the first and foremost priority.
Details analysis of quasi loan
The detailed study and analysis of this agreement and its benefits and significance, first of all it is important to know what quasi loan is. Basically it is a mutually agreed document between two parties among which one is the payee and the other one is the helper of that party. In this, both the parties agree upon paying of the loan and there is a settlement between them for that loan. According to this settlement which is paid between the two parties, the debtor party pays the loan due on the other one. In return to this favor, other party also gives certain favor to the party making the agreement.
Law of quasi loans
The law of quasi loans was found in 2006. Although it is a very complex law but it is not difficult to understand. There are only a few sections in this law which are complex and require explanation by a learned lawyer. For example the sections 197 to 225 are very complex. However it is required to provide summary of the law of quasi loans so that it is important to understand the law completely and then apply it accordingly. There are some provisions in the law of quasi loans which are applied to all the companies passing through the problems of debts and loans.
It is directed in the law that any loan will not be made to the director of the company. Moreover any company should not enter or make any guarantee regarding providing any security to the director in connection with such loan issues. It is also important to approve the transaction by a resolution. This resolution is to be made by the members of the company.