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Rental procedures for new venture

Pvt ltd 479 views 5 replies

Jananijay

HR Executive

35 Points Joined November 2013

Hi everyone,

I'm planning to start a separate private limited company and I wish to use the property which is owned by my father who's already running a company. Is there any standard norms or rules to compulsorily pay some rent for this property even though it belongs to my father? And should I need to enter into any rental agreement with them which would be required in future? In this case, what is the common procedure followed by most of the companies.? Is it better to pay rent or not to pay?

FYI: My father will become one of the directors for my new venture..

Kindly clarify on this. Thanks in advance...

Replies (5)

Sagar Devani

Corporate and International Taxation

1174 Points Joined February 2011

Yes. you need to enter into agreement with him and u need to pay him rent so that u can claim the same as expenditure in ur books.

Jananijay

HR Executive

35 Points Joined November 2013

Originally posted by : Sagar B. Devani
	Yes. you need to enter into agreement with him and u need to pay him rent so that u can claim the same as expenditure in ur books.

Thank u so much for your reply..

Kindly clarify my another question also.. Can an employee of a pvt. ltd. company become the Managing Director of some other pvt. ltd. company?

Sagar Devani

Corporate and International Taxation

1174 Points Joined February 2011

Yes. Any employee of one pvt. ltd. company can become director of another company. But he cannot become MD of another company as its not possible for a person to work full time with 2 companies. and there should not be any agreement with an employeer restricting him to become a director in other company.