conversion of loan into share capital

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Querist : Anonymous

Querist : Anonymous (Querist)

13 January 2011 Whether unsecured loan of a director can be converted into Share Capital of the private company ?

CA Sanat Pyne

CA Sanat Pyne (Expert)
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14 January 2011 There is no restriction either under IT Act or under Companies Act.But , it is advisable to get a confirmation letter from the loan provider to treat it as share application money. Share application form can also be signed by the loan provider to company.