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Repayment of loan from director...help pls

Suraag Nair (Article) (167 Points)

24 February 2012

What Resolution is required to be passed for Repayment of Director's Loan..??? please help with the procedure required to be followed

Regards

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CS Rajveer Rai, Gurgaon (CS) (646 Points)
Replied 24 February 2012

pass a simple board resolution mention amount being repaid

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Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 24 February 2012

Hi,

As per my understanding there is no need to pass any specific resolution for repayment of Loan to director. In this case director should be treated as simple creditor of the company who have been paid off.

However if you want a noting in the board minutes, you may go ahead though it is not required.

Best Regards

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CS Rajveer Rai, Gurgaon (CS) (646 Points)
Replied 24 February 2012

Agree with ankur sir no need but if you want you can note simply for that purpose

Suraag Nair (Article) (167 Points)
Replied 24 February 2012

Thank U Mr. Rajeev ...but is there any differrence as to the procedures to be followed for the repayment of loan taken from the Director of the company and as to the repayment of loan taken by the company from an outsider.. Is there no seperate procedure as such to be followed for the repayment of loan taken from the director..

Pls Guide

Suraag Nair (Article) (167 Points)
Replied 24 February 2012

Okay. Thank you Mr. Ankur and Mr. Rajeev :)

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 24 February 2012

Originally posted by : Suraag Nair
	Thank U Mr. Rajeev ...but is there any differrence as to the procedures to be followed for the repayment of loan taken from the Director of the company and as to the repayment of loan taken by the company from an outsider.. Is there no seperate procedure as such to be followed for the repayment of loan taken from the director.. Pls Guide

No there is no dirrerence in procedure.

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(Guest)

No need to note in minutes as well. It will be just overburdening a minutes book with no business as such.

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*RENU SINGH * (✩ §m!ℓ!ñġ €ม€§ fℓม!ñġ ђ♪gђ✩ ) (21627 Points)
Replied 24 February 2012

A company have to pass resolution for repayment of directors. Some certain points needs to be noted

Directors would give in writing that such money is not given as deposit....means he will specify that it's a loan.
The interst on such loan amount will also be subject to TDS from Interest.
The company will treat the loan first for the purpose it was taken.
In case company goes winding up ...then it will treated that such loan is considered as unsecured loan.

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*RENU SINGH * (✩ §m!ℓ!ñġ €ม€§ fℓม!ñġ ђ♪gђ✩ ) (21627 Points)
Replied 24 February 2012

n yes 1 thing more .......

resolution n minutes are obligations of the company ... and it should be recorded in meetings as well.

as it's a material transaction.

In short .....

company is not a sole proprietor " Jo dil kiya to chalega record karo nahi to nahi karo"

Otherwise the income tax officer section 68 charge karega ...

for unexplained credit and investments ,cash

Suraag Nair (Article) (167 Points)
Replied 24 February 2012

Thank U Ms. Neha ...Thank U Ms. Renu

@ Renu... Maam ...I think that the procedures listed down by u are things to be noted by the Company while receiving loan from the director... Please correct me if am wrong :) Thank U. My query was regarding steps needed to be followed by the company during the Repayment of loan taken by the company from the Director

Regards

1 Like