DIRECTOR

Pls help me out with the following..

1)When a bank advances loan to a Limited Company against the guarantee given by one of its directors as a collateral, whether the guarantee is to be with the Registered with the ROC? Will your answer will any way be different if the director gives his immovable property also as a security to bolster his guarantee, since the bank says that mere guarantee of the director will be of no value if not backed by any security?                                                  
    
2) The company advances to directors who travel very often for company’s business. Amount of such advances sometimes exceed the actual requirement. Will it contravene any provisions of the company’s Act?

Thanks a lot...

Replies (1)

Hi,

For compulsorily registerable charges please check section 125(4) of the companies act, 1956.

However in your case as per my opinion you are not required to file form 8 for creation of charge. Reason being security is provided by the director and not by the company. But the lender/bank may ask you to file form-8 as the charge is created for the benefit of charge holder i.e. bank.


Regards

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