LIVE GST Audit Course by CA Sachin Jain. Register Now!!

Can director purchases company property

Navaratan bokadia jain (Student CA Final ) (25 Points)

09 September 2020

can director purchase property from private limited company

Reply
Follow
Share

3 Replies

pritesh (delhi) (720 Points)
Replied 10 September 2020

Yes with proper compliances of rpt

1 Like

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 10 September 2020

If the Private Limited Company sells one of its property to any of the Director of the Company, firstly, the Company has to observe that there shall be the mandatory transfer or the sale deed duly registered, notarized and stamped. The stamp duty has to be paid as per the respective stamp duty act of the state as per the provisions of Indian Stamp Act 1899 which would depend upon the circle rate.
Further the sale of immovable property to buyer would involve the capital gain liability on seller (i.e Company) which could be either the LTCG or STCG depending upon the property.
Further as per the provisions of section 188 of the Companies act 2013, selling of property by the Company to director is the related party transaction and Company has required to do all compliance relating to approval of RPT and it's filing with ROC ext....

2 Like

kings22 (Shareholder) (160 Points)
Replied 15 April 2024

Thank you, what resolution is needed to sell the property to Director from the company? Could you please explain the details of documents needed and respective filings?