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Unsecured loans from Directors..in a Pvt. Ltd. Co. (LAW)

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This query is : Resolved


( Author )
05 September 2010

Dear Experts,
Requires URGENT ATTENTION SIR/MADAM!!
A private ltd. company which has only 2 directors has obtained unsecured loans.
1)Pls. provide me what are all the procedures to be followed while obtaining unsecured loans.
2) As a statutory auditors what are our responsibilities in verifying the compliance of the same.
3) How many people have to sign the audited accounts with respect to Companies Act and also Income tax Act?
4)Is it mandatory that the annual accounts has to be signed by the Managing Director even in case of only 2 directors are there?
5) What to do if there is no official appointment of M.D. between the 2 directors.
Thanks for the reply.
With regards,
Rajesh.


Ankur Garg

( Expert )
05 September 2010

A private company can take unsecured loan from its shareholders, directors and from their relatives and the same would not be treated as public deposits.

For taking such unsecured loan a board resolution is required to be passed in board meeting.

No ROC compliance involve in this procedure.

Regards


Ankur Garg

( Expert )
05 September 2010

3. Annual A/s are required to be signed by manager or secretary, if any, and by not less than 2 directors, one of whom shall be MD, if there is one. [Refer section 215(1)(ii)]

4. No it is not mandatory to be signed by MD, where there is no MD in the company.

5. For a private company appointment of MD is not mandatory as section 269 is not applicable for a private company.


CA. BIJENDER KR. BANSAL

( Expert )
05 September 2010

well expalined by Ankur SIr.
In case of point 1. Unsecured loan from director / shareholders, these should be subject to section 269SS & 269T.



CA. BIJENDER KR. BANSAL

( Expert )
05 September 2010

Section 269SS: Section 269SS provides that any loan or deposit shall not be taken or accepted from any other person otherwise than by an account payee cheque or account payee bank draft if,
(a) the amount of such loan or deposit or the aggregate amount of such loan and deposit ; or
(b) on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid and the amount or the aggregate amount remaining unpaid ; or
(c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is twenty thousand rupees or more :
Thus it is clear that no person can accept any loan or deposit of Rs 20000 or more otherwise than by way of an account payee cheque or an account payee draft. The limit of Rs 20000 will also apply to a case even if on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from such depositor is remaining unpaid and such unpaid amount along with the loan or deposit to be accepted, exceeds the aforesaid limit.


CA. BIJENDER KR. BANSAL

( Expert )
05 September 2010

Section 269T : Section 269T of Income Tax Act provides that any branch of a banking company or a cooperative society, firm or other person shall not repay any loan or deposit
otherwise than by an account payee cheque or account payee bank draft drawn in the name of the person, who has made the loan or deposit, if
(1) The amount of the loan or deposit together with interest is Rs 20000 or more, or
(2) The aggregate amount of loans or deposits held by such person, either in his own name or jointly with other person on the date of such repayment together with interest, is Rs 20000 or more.


Ankur Garg

( Expert )
06 September 2010

Thanks Bansal Sir for explaining the Income Tax Implications !!!

Regards


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