A big issue

In Stamped agreement, the wordings were

...in the name of...Mr XYZ, director of ABC Pvt Ltd..

Stamp Paper were purchased in the name of

ABC Pvt Ltd..

It seems complicated...Help...

according to the company law none of the official can purchase the asset of the company

 on its name, it could only be purchased on the name of the company.

in the particural situation the asset will be deemed to be of mr. xyz.

and if the company after its incorporation rectifies the same , then the company would have to raise

the secured or un secured loan on the name of mr.xyz

Based on the comment of Mr Lucky and Mr Palash, i would like to ask you that

Situation-1 If company accepts the same property

Than Do company needs to have cash in his books of account?

or simple entry will persist i.e. ( asset a/c dr  to unsecured loan of director)?

Situation-2

If company rejects

than it will be shown as asset in the books of director and director will have to generate cash for the same in his books?

Am I right?

*

Please mention the time limit for accepting or rejecting the same...

I mean when should company have to pass resolution?

3 months or 6 months etc after the date of purchase of property???

 if company rectify it then company would have to raise the debt and make the entry of purchase if it is already purcgased in cash or if have been purchased for credit just make credit purchase entry

not sure about time period of rectification, but it is about 6months

situation 2- there would be no matter of company if rejected, than it will be directors personal. and also company can do some legal prossedings against him it desires

Lucky Sir,

Can I advise company to issue shares for consideration other than cash to directors?

And purchase the assets as well?

as per your article company only have authorised capital of rs 1 lakh

Yes sir,

Company will try to increase authorised share capitals and then after  will allot it after passing resolution..

thats why i asked for time period limitation...

till the company increases its authorised capital, make the director unsecured or secured lender

Darshak, Lucky bhatia has Correctly Answered Your Questions, I'vl go with him...



Ans for Que Raised In SITUATION 1



Cash A/c Dr.

  To Loan From Director A/C



Asset A/c Dr.

  To Cash A/C



Thus cash A/c will be NIL



SITUATION 2



---SAME AS Mr. Bhatia ANSWERED---

Ok sir,

From the companys view point,

Assets a/c dr

    To Director's A/c

Than company will increase share capital..and will issue shares...