Companies act 2013

Others 869 views 9 replies

akanksha

CA Final Student

325 Points Joined August 2012

Hello

My question is regarding loan by directors of a small private limited company to his company

As per my knowledge, the directors as per companies act 2013 can give loans to their companies but these loans should be from own sources. Now i have question about the meaning of own sources?

In my case the director has the capital of Rs 50,00,000 as on 31.03.2014 in his balance sheet. As on 31.03.2014 Rs 50 Lakhs is invested in Land of Rs 2500000 and the balance is invested in his other business (retailers)

Now i want ask that what amount will be considered as own sources for the director to give loan to his Company?

Thanks

Replies (9)

akanksha

CA Final Student

325 Points Joined August 2012

Please reply URGENT

akanksha

CA Final Student

325 Points Joined August 2012

no answer till now

pratik

1186 Points Joined November 2008

As per Rules where Deposits has been defined- any money borrowed from Director doesnt tantamounts to 'Deposits' if such Director gives a declaration that money so lent to the Company is out of his own personal sources and not borrowed from Bank/FI's. Own funds means his own capital and not borrowed from FI/Banks and then given as loan to company....

akanksha

CA Final Student

325 Points Joined August 2012

Hello Pratik Sir,

Here my question is that director has 50 lakhs of capital. But that 50 Lakhs is not in liquid form. That is invested in land and business. So How will the director arrange for the loan of Rs 25 Lakhs to be given to company? Will he be required to sell off his land and then give on loan? or he can give loan from any other sources upto Rs 50 Lakh (amount equal to his capital)

Thanks

pratik

1186 Points Joined November 2008

Yes he will have to sell the land and give to company. If he avails loan from Bank/FI with his property as security then provides to loan, it will be non-complaince of the rules..