1. CAN A PRIVATE LIMITED COMPANY ISSUE SHARES TO CERTAIN PROMOTERS BY CREDITING SUCH AMOUNTS TO LOAN ACCOUNTS ? ( CAN SHARE CAPITAL BE ISSUED WITHOUT PHYSICALLY RECEIVING MONEY BY KEEPING SUCH MONEY AS RECEIVABLES IN RESPECTIVE LOAN ACCOUNT IN BOOKS )
2. CAN SUCH LOAN ACCOUNTS BE WRITTEN OFF ?
3. WHAT WILL PROMOTER BE LIABLE TO INCOME TAX ? IF SUCH RECEIVABLE IS WRITEEN OFF BY THE COMPANY ?
Hi
A company can received loan from its promoters there is no restriction.
HI James,
As per my opinion, you cannot do so. Co can't credit share capital account if no money (i.e. either call money or capital) is received.
I am answering this with reference to journal entries I have learned. However, other valuable views are awaited.
CAclubindia
