A person is having two separate proprietary firms and he is only the proprietor of the both the firms. One firm is having surplus cash on hand and other one is having negative cash. So I want to know whether a) Can I transfer cash from one proprietary firm to another one where cash is short ? b) whether I have to treat is as loan ? c) whether law of cash loan of more than Rs 20,000 can not be taken will be applicable here ?
24 September 2016
U can transfer the amount, other than cash, I'll suggest not involve cash for the mentioned query. Do not show it as a loan, coz many aspects will arise in loan. Interest, TDS, compliances etc. I'll suggest to show Drawings from one enterprise and then capital intro by proprietor.
05 October 2021
The proprietor having owner of both the firm can exchange cash in any of the firms, which will not be considered as loan or cash transfer; as the different firms are for your understanding, and for ease of maintaining different recods; but for any other department, or ITD, it is just one entity.
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