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Advance salary to a full time director in pvt ltd

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This query is : Resolved

Divya Garg (Querist)

31 May 2014 Are we allowed to give 3 months advance salary to full time director of a PVT lTD company ?

Is there any restrictions on that ?

Ankur Garg

Ankur Garg (Expert)

01 June 2014 You have to take care of section 185 of companies act, 2013 related to loan to director as the same is also applicable to private company.

Also check your AOA in this regard.

Thanks

Divya Garg

Divya Garg (Querist)

03 June 2014 But this is actually a salary advance as we do in case of normal employees and not a loan ?

AOA doesn't prohibit anything for this.

So, will this be acceptable ?

Ankur Garg

Ankur Garg (Expert)

03 June 2014 Now as per the provisions of section 186 even loan to employee is covered under section 186.

Please go through section 186 of companies act, 2013 carefully.

Thanks

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