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Repayment of loan by service

04 January 2023

Is there any restriction on repayment of loan by a company by providing service as per company act,2013?

is any resolution need to pass for this?

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3 Replies

Aisha (Finance Professional) (7547 Points)
Replied 04 January 2023

Yes, if a company decides to repay a loan, a resolution must be passed by the board of directors to that effect. The resolution should specify the details of the repayment, including the amount to be repaid and the date of repayment.

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ankurika saikia (student) (55 Points)
Replied 04 January 2023

Thanks Aisha..

Chirag (Professional) (1979 Points)
Replied 05 January 2023

@ Ankurika ,There is no restriction on repayment of loan by providing service in lieu of actual repayment if it's included in terms of agreement or not increasing or substantially changing the repayment made in cash as compared to service ,only when equity is issued for loan then there is a need to pass s/r ,else ,just repayment is not require any resolution because it's already approved at time of taking loan u/s 179..