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Loan to director in pvt limited company

Nikkk (CA) (60 Points)

10 March 2016

Is pvt ltd company give loan to its director or its relative or managing director or part time directors? IF not ,what is the procedure to correct the mistake if given by company? or if salary paid above its payable in year end then what ca i do ?

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prakash (Company Secretary) (1352 Points)
Replied 10 March 2016

Arora,

The private companies can give loans to directors, if following conditions are complied;

1. in whose share capital no other body corporate has invested any money.

2. if borrowing of such a company from banks or financial institution or any body corporate is less than twice of its paid up capital or 50 crores rupees whichever is lower and

3 Such a company has no defaults in repayment of such borrowings subsisting .

Nikkk (CA) (60 Points)
Replied 10 March 2016

thanks Prakash

but as per which section

prakash (Company Secretary) (1352 Points)
Replied 11 March 2016

Arora,

It is as per section 185 of the CA, 2013, but you may not find same in respective section right now, since it is inserted by MCA Notification dated 5.06.2015, exemption to private limited company.

Enclosed notification for your reference, see point 14.

Attached File : 735705 20160311073944 exemptions to private companies 05062015.pdf downloaded: 180 times