Loan from Directors and Members of pvt.ltd. company
This query is : Resolved
DINESH BHATIA
(Querist)
14 June 2011
What are requirements to be fulfilled for raising loans from directors or members of a pvt.ltd company?
What if loan is higher than paid up capital of company? is there any cap on interest payable in such cases?
What if loan is higher than paid up capital of company? is there any cap on interest payable in such cases?
15 June 2011
There no such formalities except passing a resolution in the Board of Director's meeting for accepting loan from the directors as well as the shareholders.
There is also no limit for interest rate to be paid to the directors and shareholder but the same should be reasonable. As per the Income Tax Act Section $0A(2) this is to be reported and if the assessing officer finds the same in excess the same shall be disallowed and the company has to pay the tax on the same with interest.
C. A. S. S. Agarwal, Mumbai
09870243410
There is also no limit for interest rate to be paid to the directors and shareholder but the same should be reasonable. As per the Income Tax Act Section $0A(2) this is to be reported and if the assessing officer finds the same in excess the same shall be disallowed and the company has to pay the tax on the same with interest.
C. A. S. S. Agarwal, Mumbai
09870243410
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DINESH BHATIA
(Querist)
17 June 2011
Many thanks Mr. Agarwal for replying.
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