loan instalments of Director

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Aneesh Nair (Querist)
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14 July 2008 i just want to know that one of my Director of my company purchased vehicle on his personal name and his instalments is coming in companies account so where will this ledger grouped, if its in the name of company it will under secured loan please clary my both quries

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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14 July 2008 No, it is not a loan in the hands of the company. As per loan agreement the director has signed the agreement in his individual capacity. Also, it seems that the vehicle too is in the name of the director. In case, the company want to show the vehicle as well as loan in its B.Sheet then loan can be shown under the head of Secured Loans and Vehicle as a Fixed Asset but a qualification should appear in the Audit Report that the asset has not been purchased in the name of the company and loan taken is also not in the name of the company. It is worth mentioning that all Fixed Assets should be owned by the company in its own name and loan facility should also be in its own name.