Can a director, who is also a shareholder, at the private limited company advance a loan to the company? Can he forward a loan in his capacity as a director or will the new Act estoppe him from giving any loan as he is also a shareholder? Any case law or provision to decide this question?
Menu
Loans from a director-shareholder
Replies (2)
According to companies(Acceptance of Deposits) Rules 2014, any amount received from the directors, who at the time of receipt of the amount, was a director of the company will not be considered as deposits.
Therefore, in your case amount paid in the capacity of director will not be considered as deposit even he is a shareholder as there is no exception provided to that.
Amount recd. from a director as a loan is not deposit only if it is not given out of the funds borrowed by him from others or from any other deposits or loans, a declaration to this effect needs to be obtained from director, otherwise, it will be deposits
violation of law relating to deposit attract very high penalties, neet due compliance in such cases.
Recent Topic
- CGAS account Holder Deceased
- ITR form suggestion
- Post office KVP income.
- Free GST invoice tool I built for my practice R
- Clarification on Gratuity Exemption under Section
- GOODS AND SERVICE TAX - GSTR 1
- Correct ITR form
- Clarification required on Section 393 & Report
- Professional advance taxes
- Surrender pan process
Related Topics
CAclubindia
