Car in Director Name and used by Company

This query is : Resolved

Sivaraman A R (Querist)
Follow

05 January 2011
A motor car is in the name of Director. But it is used fully for PRIVATE company's business purpose. Loan repayment is from company. Can the company claim depreciation and interest on loan? What is solution to bring the car in the balance sheet of the company?

Please suggest me the legal procedure.

CS Taher

CS Taher (Expert)
Follow

05 January 2011 TRANSFER THE OWNERSHIP OF CAR FROM DIRECTOR TO COMPANY..NO THE COMPANY CAN NOT CLAIM DEPRECIATION AND INTEREST ON LOAN TILL THE OWNERSHIP IS TRANSFERRED TO COMPANY`S NAME.

Jayashree S Iyer

Jayashree S Iyer (Expert)
Follow

06 January 2011 Agree with Taher. The company cannot claim depreciation and interiest on loan. Only way is to transfer the ownership to company.

Sivaraman A R

Sivaraman A R (Querist)
Follow

06 January 2011 what is the legal procedure to transfer?

CS Taher

CS Taher (Expert)
Follow

06 January 2011 Draft a agreement of sale, regarding sale of the motor vechile from Director possesion to Company and register the same agreement at the regional Transport office of the state where the company is register.
But before Drafting the sale agreement between the Director and the company, the director has to take the consent of the Board of Directors in Board Meeting as provided under provision of Section 297 of Companies Act 1956.

Message likes : 1 times

Jayashree S Iyer

Jayashree S Iyer (Expert)
Follow

07 January 2011 Well said Taher.

If the paid up capital of the company is >1 crore CG approval is also to be taken as provided in Section 297 of the Companies Act, 1956.

Routine RTO Vehicle transfer formalities are to be followed.