‘unsecured loan from director-cum-shareholder’

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ARTHI (Querist)
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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)
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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)
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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.