‘unsecured loan from director-cum-shareholder’

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This query is : Resolved

ARTHI (Querist)

16 September 2014 Dear Experts,

A Private Limited Company has Authorised Capital of Rs.1 Lakh.

Company has been continuing for many years ‘Unsecured Loan from Director-cum-Shareholder’ of Rs.2.25 Lakhs in the Balance Sheet, however, its paid up Capital is only Rs.1 Lakh.

In view of CA 2013, I have the following query(s):

What has to be done for the ‘Unsecured Loan from Director-cum-Shareholder’, which has been continuing and reflecting in the Balance Sheet for many years?

Please reply…………………. with any URL / relevant Section for me to understand in detail.

What are the effects to be done in the Company’s Balance Sheet with immediate effect?

Please reply………………….

Should there be any qualification/remarks by the Auditor, in case, the Company still continue with the Share Application Money?

Please reply………………….

Thanks a lot to all in advance for doing the needful.

CA Parul Saxena

CA Parul Saxena (Expert)

16 September 2014 you should pay off the entire secured loan to the director till march 2015.wait for the others opinion

ARTHI

ARTHI (Querist)

16 September 2014 It may be read as UNSECURED LOAN from Director-cum-Shareholder’.

Somewhere, I noticed that Unsecured Loan from Director is permissible provided that Director should produce a Declaration to that effect.

As I do not have sufficient knowledge and clarity, I posted my query.

Hence, request every one to guide me properly with the appropriate supporting so that I will go through, understand and improve myself with your guidance.