Car Maintainance and running exp

This query is : Resolved

ANIL (Querist)
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11 September 2008 Two/Three cars are in the name of Director (personal)and booked in his personal books of accounts, but it is used for staff usages in the office, can we put running and maint expenses in the books of account of the company (pvt ltd.)or do we need to have to make some kind of agreement, director doesn't want to charge any rent or hiring charges from the comapny.

Kindly advise.

Regards.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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11 September 2008 Agreement is necessary.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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12 September 2008 While agreement is necessary, it is better the vehicles are transferred to company's name to avoid unnecessary litigation with tax authorities.

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Raman R

Raman R (Expert)
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12 September 2008 If the vehciles are personally owned by the Director (Personal), agreement is a must. Further the applicability of provisions of Companies Act to the contract should also be looked into.

As suggested by Mr. Raghavan, it is advisable to avoid these kind of transactions and better allot the vehicles registered in the company name