Loan to director
Querist : Anonymous
Querist : Anonymous
if the loans were given in 2012, then for what purpose you are asking for the procedure to give such loans??
Querist : Anonymous
when a company gives loan to director, it is called as "Deemed Dividend" as per Income Tax Act 1961 and ultimately the company has to pay dividend distribution tax on such loan.
Further, the procedure of companies act has to be followed
regards
deemed dividend applies to shareholder. It is not automatic assumption that director is the shareholder or the substantial shareholder.
In a given situation, a company is a Pvt Ltd Co.
In most cases Pvt Co is closely held / family owned company wherein either directors are themselves shareholders or at least the family members.
So deemed dividend concept is very much applicable.
Querist : Anonymous
However, this won't change the nature of transaction and the director still have to repay this loan back.
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