CS MOHIT SALUJA (PRACTICING CS Jalandhar 9914558709) (5155 Points)
29 April 2013Company A purchased a machinery for which director pay from his own personal account but the bill for machinery was made on name of company. now company want to issue the shares to the directors by showing issue of shares for consideration other cash. Now what is the remedy in this respect.
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 21 May 2013
It is not a case of issue of shares for consideration other than cash. Company must have purchased machinery from third party. Hence company should show it as unsecured loan from the director which can then be converted into equity after completing formalities.
However, if the machinery was supplied by the director himself, in that case it will be issue of shares for consideration other than cash.
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