25 March 2010
Mr. X had made a payment towards the instalment of plot and thereafter form a company and become a director cum shareholder of that company. Thereafter company is making payment of instalments which is to be t/f in the name of company after making the full payment. What effect should be given for previous payment made by Mr. X in the books of company. Whether U/L or Share Application Money
25 March 2010
the effect depends on the understanding between the company and its director. If the understanding is that the comapny will issue shares to Mr x then show it as share application money and take a board noting for the same.
However, if the understanding is that the money will be reimbursed by the company then show it as loans from director.
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