Loan to a Director
This query is : Resolved
CA Ysil Karunai
(Querist)
05 May 2009
Dear Sir,
Suppose a Director withdrewing every month Rs. 10,000 from a company.
1.Whether it should be treated as loan to director?
2.If yes, what is the rate of percentage of interest on loan?
3. Is there any alternative method of treating this withdrawal by director as per companies act?
4. which section deals about this?
Suppose a Director withdrewing every month Rs. 10,000 from a company.
1.Whether it should be treated as loan to director?
2.If yes, what is the rate of percentage of interest on loan?
3. Is there any alternative method of treating this withdrawal by director as per companies act?
4. which section deals about this?
CA Tilak Raj Sharma
(Expert)
05 May 2009
1. Yes, it can be treated as a loan.
2. There is no such minimum or maximum limit. It is charged as per the loan agreement or the rate approved my members in the general meeting.
3. You can post these transactions into Director's current account in Company Books and charge no interest.
2. There is no such minimum or maximum limit. It is charged as per the loan agreement or the rate approved my members in the general meeting.
3. You can post these transactions into Director's current account in Company Books and charge no interest.
Ankur Garg
(Expert)
10 May 2009
Please tell me-Your dis is drawing Rs. 10000 in which capacity.
If your co. is a pvt. co. & he is drawing Rs. 10000 as remuneration then there is no prob.
But if he is not drawing as remuneration them it will be treated as Loan to Directors and section-295 applicable.
If your co. is a pvt. co. & he is drawing Rs. 10000 as remuneration then there is no prob.
But if he is not drawing as remuneration them it will be treated as Loan to Directors and section-295 applicable.
Ankur Garg
(Expert)
10 May 2009
Kindly note violation of section-295 i.e. loan to director without Central Govt. approval is a very serious offence.
Director concerned is liable to vacation of office u/s 283.
Director concerned is liable to vacation of office u/s 283.
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