A company had taken a loan from an entity and the same is repaid by it's director. Whether this is allowed under Companies Act,2013 ? Or is it a violation of the Act?
Replies (3)
Quick Summary
This discussion examines whether a director repaying a company's loan is permissible under the Companies Act, 2013. The consensus suggests it is generally allowed, as directors can cover company expenses. The loan effectively becomes a debt owed by the company to the director, which the company must then repay. However, it's crucial to ensure compliance with deposit rules and avoid any round-tripping schemes.
According to me there is no violation of law. if a director can pay for other expenses on behalf of co they can also repay the loan as well... for more clarity you can google and consult a professional
Yes , a company can take a Loan from director and repay it to lending entity ,but you have to ensure that there is no violation of deposit rules as well no round tripping involved !