Promoter

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Querist : Anonymous

Querist : Anonymous (Querist)

26 November 2014 Can a promoter company make expenditures for setting up a project in its promotee company? Is it allowable and is there any case law regarding this?

Amol S Joglekar

Amol S Joglekar (Expert)
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26 November 2014 Yes. The same shall be regarded as pre incorporation expenses.
If the expenses are incurred after the incorporation, it will amount to LOAN from Promotor Company to Promotee Company.

Querist : Anonymous

Querist : Anonymous (Querist)

27 November 2014 Thanks for your Expert view Sir. But can the promoter company book expenses in its books of accounts?

Amol S Joglekar

Amol S Joglekar (Expert)
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27 November 2014 No, it can NOT book the expenses. It is a loan given to Promotee company for the expenses to be incurred by the Promotee company

Querist : Anonymous

Querist : Anonymous (Querist)

28 November 2014 Thanks a lot Sir for the guidance.

Amol S Joglekar

Amol S Joglekar (Expert)
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28 November 2014 You are most welcome.
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