If a long given/taken exceeds 20000, it has to be given/taken in a/c payee cheque or draft i.e. other than cash. But is this a daily limit or annual limit or a cumulative limit?
Furthermore, can a Pvt Ltd Company take loans from its directors without following this section or is it also applicable to them?
IT IS IN TOTAL
MEANS TOTAL LOANS AT ANY TIME SHOULD NEVER EXCEEDS RS. 20,000/-
IF YOU WANT TO GET LOAN OF RS, 15000/- U CAN RAISE LOAN IN CASH BUT IS U FURTHER WANT TO RAISE LOAN FROM THE SAME PERSON BY RS, 10,000/- U CAN RAISE ONLY THROUGH CHARQUE AND NOT IN CASH AS THE LIMIT OF RS. 20,000/- WILL GET EXCEEDS
SAME IS ALSO APPLICABLE TO LOAN FROM DIRECTORS ALSO
And if a Company has taken loans in cash from 3-4 people of Rs.15000 each, then that is not a problem, correct?
NO PROBLEM
CAclubindia
