Loan to Director

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 April 2010 Pvt Ltd. Co. paid EMI of Personal loan taken by Shareholder and debited EMI's paid to Share Application Money Account.

As A Auditor what should be the prof. opinion.

Kindly refer to Sections affceted of Companies Act.

Ankur Garg

Ankur Garg (Expert)
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10 April 2010 We can not treat the above transaction as loan to director u/s 295 as section 295 is not applicable to a purely private company.

Regards

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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10 April 2010 If a Pvt. Ltd. Company paid EMI of personal loan of Shareholder, Then how can you debited Shareapplication money account, whether Share application money recd is not converted into share capital.
If yes, then until & unless Share Application money is not coverted into share Capital , The person cannot be treated as Shareholder.
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