Director's remuneration

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 February 2010 Dear sir,

I seek to have guidance on the following points :-
1. Whether a Pvt Ltd company running under loss can pay remunerations to it's directors.

2. Can a director of PVT Ltd Company get interest free loan from his pvt ltd company?

With best regards

CA Chitresh Gupta

CA Chitresh Gupta (Expert)
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17 February 2010 Yes, the private limited company can pay director remuniration even if there is loss.

As regards to your second query, the private limited company can't give loan to its director. Since the same will amount to deemed dividend under sec 2(22)(e)and become taxable.

Regards

Message likes : 1 times

Ankur Garg

Ankur Garg (Expert)
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17 February 2010 1. Yes because strict provisions regarding managerial remuneration are not applicable to a pvt. co.

2. Yes. But only with the prior approval of central govt. u/s 295.

Message likes : 2 times

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