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Office rent to director at the beginning of each month

Pvt ltd 266 views 1 replies

Can a Director of the Pvt. Ltd company be paid rent at the beginning of each month? Does it conflict with the advance payment clause for directors in Company Act 2013?

Replies (1)

Sec.185 of Companies Act 2013 prohibits giving loans to directors.  'Advance' again supply  of goods or  services is  not  loan if it is in the normal course and usual trade practice.  In your case also it can be argued accordingly provided it is a genuine transaction and premises have been in fact used by the company  till the month  end.

 


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