Liable for Liability

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 May 2010 Dear Sir,

In a Private Ltd company who is Liable for Liability.

Please tell me
Director Liability in a Pvt Ltd

Regards
Ananda

Rasesh

Rasesh (Expert)
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18 May 2010 If the private limited company is a company whose capital is limited by share capital, then the ultimate liability is with the Company itself.

The directors are not liable unless they have given their personal guarantees. If the equity capital is unpaid, then liability to the extent of the unpaid capital would stand.

Querist : Anonymous

Querist : Anonymous (Querist)

03 June 2010 Dear Sir,

Thank you

In my case, we are a Pvt Ltd company. We are not disturbuting the product directly to market or it is not our brand.
we are manufacturing and packing the product and selling to ABRL only. Their brand is manufacturing and selling them. In that case thier is no share holder.
tell now who is liable for liability.

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Rasesh

Rasesh (Expert)
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03 June 2010 Liability for defect in the product would be with ABRL. However, ABRL may require an agreement with your company wherein you may be required to indemnify them for any liability that is incurred to them for any defect in the product. However, it depends on such agreement. Otherwise there is no liability on your company.

Querist : Anonymous

Querist : Anonymous (Querist)

22 September 2011 Dear Sir

thanks a lot

Please let me know the cash payment limitation in a day and month.

Querist : Anonymous

Querist : Anonymous (Querist)

22 September 2011 Dear Sir

thanks a lot

Please let me know the cash payment limitation in a day and month.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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02 August 2024 ### **Liability in a Private Limited Company:**

1. **Liability of the Company:**
- **Corporate Liability:** In a private limited company, the company itself is a separate legal entity and is primarily responsible for its liabilities. This includes debts, obligations, and any other financial responsibilities incurred in the course of its business activities.
- **Limited Liability:** Shareholders of a private limited company are generally only liable for the company's debts up to the amount unpaid on their shares. This means that their personal assets are protected, and their liability is limited to their investment in the company.

2. **Liability of Directors:**
- **Director's Liability:** Directors are responsible for ensuring that the company complies with statutory requirements and conducts its business legally. They can be held liable for certain actions or omissions if they breach their duties, such as fiduciary duties or statutory obligations.
- **Personal Liability:** Directors may be held personally liable in specific situations, such as if they have committed fraud, failed to pay taxes, or acted beyond their authority.

### **Cash Payment Limitations:**

As per the Income Tax Act, the following limitations apply to cash transactions in India:

1. **Cash Payment Limit for Individuals:**
- **Section 269ST:** As per Section 269ST of the Income Tax Act, any cash transaction exceeding ₹2 lakh (₹200,000) is prohibited. This section applies to transactions between an individual and any other person.
- **Exceptions:** This limit applies to cash payments or receipts. However, certain exceptions apply, such as payments made to or received from the government, payments made through a banking channel, and certain transactions involving agricultural income.

2. **Cash Transactions in Business:**
- **Business Transactions:** For business transactions, the limit of ₹2 lakh is also applicable. Businesses are required to ensure that cash transactions do not exceed this amount, to avoid penalties and issues with tax compliance.

3. **Penalties for Violation:**
- **Penalty for Cash Transactions:** If the cash payment or receipt exceeds ₹2 lakh, a penalty equal to the amount of such transactions may be imposed.

### **Summary:**

- **Liability in a Private Ltd Company:** The company itself is liable for its financial obligations, while directors are responsible for ensuring compliance and may be personally liable for specific breaches.
- **Cash Payment Limit:** The limit for cash transactions is ₹2 lakh (₹200,000) as per Section 269ST of the Income Tax Act. Transactions exceeding this limit should be conducted through banking channels to avoid penalties.

Ensure compliance with these regulations to avoid legal and financial repercussions.