Loans to a private company by its related parties.

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Avinash Karmarkar (Querist)
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18 August 2012 Please clarify teh following query.

While registering a private company, the registration fee has been paid by its sister concern( a partnership firm) by way of cash. Whether it amounts to a loan to a private comapny? whether loans can be given in cash?

Ajay Mishra

Ajay Mishra (Expert)
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18 August 2012 Hi

It will not treated as loan, because the amount is taken before registration of company. But after incorporation the company can make fresh contract to ratify the pre incorporation contract.

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