Hi everyone,
I have a doubt on the following question:
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 company’s Act?
If any one has idea about this then please reply
Thanks
You have to check the supporting documents for the actual amount spent by the director. If it is less than the advances given then that amount has to be given back by the directors. If he didn't returned that money then the payroll dept. has to deduct it from his salary.
You should also check whether the directors salary including the advances paid in excess of actuals, exceeded the maximum ceiling for directors remuneration fixed under companies act.
You can also argue that the excess advance paid is as equal as loan given as per Sec 295 of companies act (provided if it is not returned by the director)
CAclubindia
