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Loan from Director

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(Querist)
30 March 2009 Can a private company take loan from its director, is there any limit to it. can a director transfer his personal assets to the company and at what price, can the same be shown as a loan to the company. Is he entitle to interest at 6% p.a on that loan
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Deepak Goel

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Deepak Goel (Expert)
30 March 2009 Yes, a private company can take loan from its director subject to a maximum of paid-up capital.
2. Director can transfer his personal assets to the company on a fare market value.
3. Assets cannot be shown as a loan to the company. Loan should be in kind of money and entitle for interest at a mutual understanding or a market prevailing rate of interest.
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CA Nitin Wadhwani

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CA Nitin Wadhwani (Expert)
31 March 2009 There can be loan in kind also by the director since there is no contravening provision to the same effect.
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CA Nitin Wadhwani

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CA Nitin Wadhwani (Expert)
31 March 2009 Also in a private company there is no restriction on amount of loan.
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