Cash withdrawal by directors

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Vivek (Querist)
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20 February 2008 Whether Managing Director of a Private limited company can withdraw and deposit cash through current account transactions

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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20 February 2008 Your query is not clear:

1.Are you talking about the with drawal of cash from company's current account as part of day to day operations?

2. What is the quantum?

3. What for?

4. Why this doubt has arisen?

CA. GOPAL SONIKA

CA. GOPAL SONIKA (Expert)
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20 February 2008 The question is not clear. In simple words yes. But the purpose if known may clear the issue further.

Srinivas Sharma KN

Srinivas Sharma KN (Expert)
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20 February 2008 Question not clear. Please specify, what do you means by current account, is it bank account or MD's A/c? If it is MD's, it has to be treated advance. Please explain the question in detail, so that we can answer clearly.

SAM KOSHY

SAM KOSHY (Expert)
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21 February 2008
Your query is not clear.

If the proprietor /MD of the private limited company is the owner of the firm, he can transfer / withdraw cash from company's current account to his personal account ( i.e transfer of cash to proprietor's current a/c & listed under the header properitor drawings).

Your query is not clear.Explain in detail

S.K.

Vivek

Vivek (Querist)
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25 February 2008 The company opens a suspense account through which the director withdraw cash and deposit cash. Debit and credit is given to suspense account respectively. Whether such a situation allowed.

SAM KOSHY

SAM KOSHY (Expert)
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25 February 2008 Mr.Vivek

Either you can open a new bank account for this purpose or create a IOU-loans/ Advannces a/c internally. You can give debit and credit entries to this suspense account and can give credit entries to overhead expenses or mgmt expenses / drawings.

Sam Koshy

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