Loan to directors

Company cannot give loan to its own directors,,,,if taken any any other form will be treated as deemed dividend and is taxable in the ssame year.

but new companies act allows private Ltd to give loans to directors....
please help

please refer section 185 of the companies act 2013. it prohibits a company from providing loan, guarantee or security to any of its directors. So A COMPANY CANNOT PROVIDE LOAN TO ITS DIRECTOR.

Yes... I agreed to Mr Ashwin Kumar.,

@ SWARUP VYAS.,

Better to get solution then read sec 185 with 186.

Yeah. Possible.
Private Company can give loan to directors, if such company satisfy the 3 conditions.
1. No other body corporate has invested in share capital of the private company.
2. If the borrowings of private company is less than twice its paid up share capital or 50 Cr, whichever is lower. And
3. The private company is not in default in repayment of borrowing at this time.

If private company satisfy the above conditions, then it can give loan to its directors.

As per the Provisions of the Companies Act 2013, the Company cannot give loan directly to the Director but can give loan to the private Company in which there is common director or to body corporate in which 25 percent or more of the holding is held by such Director.

 

But if the following conditions are satisfied, the  privateCompany can give Loan to Director

1. No other body corporate has invested in that body corporate.

2. Amount borrowed from bank or financial institution is less than twice the paid up capital or 50 crore whichever is less.

3. The Company has not defaulted in the payment of Loan 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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2. The amount of loan