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Related party transection
A pvt ltd co 4 director and 30 shareholders all are famlily members. Company has taken loan from shareholder on interrst. As company law shareholder loan to be paid by 31.03.2015. As compay has no funds to repay loan. Co can sell goods to them in liue of their loan in which 2 of the co director arr partners so while selling the goods are sold against loan will sec.188 will apply to this. URGENT REPLY.
Replies (2)
Yes u can sold the goods but make sure that it must be at market price.
Shareholder loan is allowed but there are lot of rules and regulation needs to be followed.
Read section 74 and 186
In the balance sheet the loan taken from shareholders might be shown as "Unsecured Loan" and not advance received against goods. So need to first repay the whole money through an entry and again obtain money from them and sell the goods via an entry in the books of accounts.
Moreover Related party transaction is w.r.t. director's interest and transaction. If goods are being sold to shareholders, section 188 will not attract. Correct me if i am wrong.
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