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Transfer of funds

jaya Sanal (Senior accountant) (44 Points)

29 July 2016

We have a Proprietorship Firm and Pvt Limited Company (separate entities) being run by same person. Can we transfer funds from the existing proprietorship firm to the newly constituted Pvt Ltd company for meeting the preliminary expenses. What is the exact law

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CS MOHIT SALUJA (PRACTICING CS Jalandhar 9914558709) (5155 Points)
Replied 30 July 2016

YES the funds can be used from Prop. Firm for the company as the expenses incurred from Prop. is the capital of the director earned from his prop. business and hence he can use such funds thereby ratify the expenses in the company after incorporation and such expenses can be paid from company's account to the prof. of the prop. firm.