Loan to Pvt. Ltd.Co., by Director

This query is : Resolved

anckoora (Querist)
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09 July 2011 Dear Sir,

Can Directors give a loan (on interest) to a Pvt. Ltd. Co. in which they are directors ?

thanks
anckoora

CA Navin Jain

CA Navin Jain (Expert)
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09 July 2011 yes, pvt ltd company can taken unsecured loan from directors and their relatives

Aditya Maheshwari

Aditya Maheshwari (Expert)
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09 July 2011 yes the directors can give but the interest rate should be as per prevailing market rates.

anckoora

anckoora (Querist)
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09 July 2011 But sir, they are taking remuneration from that pvt. ltd. co. In this case also, they can give unsecured loan to co ??

anckoora

CA Navin Jain

CA Navin Jain (Expert)
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09 July 2011 yes, if director getting remuneration from company then he also give unsecured loan to company

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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09 July 2011 The company should obtain a confirmatory letter also from the director concerned, stating that the money lent to the company is not borrowed by him/her. This is for the compliance of the Companies Act,1956.

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