Clarification as to conversion of Unsecured loans

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CA Sanjay Baheti (Querist)
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18 May 2010 My client being Pvt Ltd. Co. having Authorised capital & Paid Capital of Rs.5000000/- & 100000/- respectively as on 31.03.2009. Now during the year 2009-10 the company received unsecured loans from directors of Rs.1550000/- in the month of Nov,2009,Dec,2009 & Jan,2010. However we want to consider the same as share application Money by converting it through Journal as on 31.03.2010 so that we can issue the shares by filing Form No.2 latest by 31.05.2010.

My query is whether it is possible through Hawala/JV & also benificial or not from law point of view.

Please reply urgent.

regards

CA Shiv

CA Shiv (Expert)
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18 May 2010 Yes definately from view point of law and IT act it is very beneficial. But check that the itnerest is not paid till date.... With the JV you can do that...
Or else if u have paid any interest.
Than pass different entries showing the unsecured loan paid back and application money received from the directors.

Other experts opinion awaited...