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Director as a creditor

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Nisha Yadav

Accounts exe

267 Points Posted on 18 December 2012

Dear All,

Can a Director be a creditor for same company??

Actualy i got a Bill from director for Consultancy Fee, Now problem is that where i show to director a/c .....

In under of Sundry creditors or under of Unsecured loan ...

Is it true that we cant show to a director in creditors list...

Please help me i m counfused .....

Thanks to all

Replies (1)

shivaji prasad bhimavarapu

CHARTERED ACCOUNTANT

1842 Points Posted on 18 December 2012

The Director can be a creditor.In your case the bill pending is for services.It can be shown under Outstanding expenses. But for the contracts entered with related parties, the Fee should be as per the prevailing market rates. See Sec 301- Register for Contracts, the information has to be enteed in the register. As the information given is not sufficient, please Check with Sec 297 and 299 of Companies Act.