Booking of expenses made by promoters as loan to company
This query is : Resolved
05 April 2016
Hello,
The promoters of the company are also the directors of the company and they had made business expenses on behalf of company before and after company's incorporation. Now we wish to book such expenses as loan to company and then issue them equity shares in lieu of their loan as the company dont have funds to repay them. One of the solution can be to pass a special resolution under section 62(3) of the companies act, 2013, but the same needs be done. But over here we got to know about taking such a step after a year of incorporation. And also we have passed necessary board resolution and Special Resolution for increasing authorised capital immediately after incorporation and hence there in no scope for passing any other back dated resolution at the time of initial days of incorporation. Can anybody help me in structuring of such allotment against loan in this matter?
The promoters of the company are also the directors of the company and they had made business expenses on behalf of company before and after company's incorporation. Now we wish to book such expenses as loan to company and then issue them equity shares in lieu of their loan as the company dont have funds to repay them. One of the solution can be to pass a special resolution under section 62(3) of the companies act, 2013, but the same needs be done. But over here we got to know about taking such a step after a year of incorporation. And also we have passed necessary board resolution and Special Resolution for increasing authorised capital immediately after incorporation and hence there in no scope for passing any other back dated resolution at the time of initial days of incorporation. Can anybody help me in structuring of such allotment against loan in this matter?
06 April 2016
Kindly refer to Section 42 or Section 62(1)(c) r/w Rule 13 of Companies (Share Capital & Debenture) Rules 2014
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