loan to the directors
This query is : Resolved
24 January 2011
Can a private limited company provide loans to its directors. If so, what are the formalities
Sunil Kr. Sanganeria
(Expert)
24 January 2011
A Private Company Can give loan to its Director as Section 295 of the Companies act does not attract.
you can enter into an agreement with the Director and pass a resolution in the Board of Directors Meeting. You also have to make an entry in Register maintained u/s 301 of the Companies Act.
But so far as income Tax is Concerned, Please check the holding of director in the Company. If it is 10% or more, Section 2(22)(e) of the Income Tax will get attract anf the loan amount will be deemed to be Dividend.
you can enter into an agreement with the Director and pass a resolution in the Board of Directors Meeting. You also have to make an entry in Register maintained u/s 301 of the Companies Act.
But so far as income Tax is Concerned, Please check the holding of director in the Company. If it is 10% or more, Section 2(22)(e) of the Income Tax will get attract anf the loan amount will be deemed to be Dividend.
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