LOAN TO DIRECTOR
This query is : Resolved
01 September 2009
what are the consequences , if a public limited company make loan to director which is refundable after some period of time.
(Note :- without the approval of Central Government.)
(Note :- without the approval of Central Government.)
01 September 2009
Vacation of office of Director under section 283(1)(h) fro the violation of section 295.
01 September 2009
Also note section 295 does not make any difference between loan made is refundable or non-refundable. In fact the loan by very nature is refundable.
01 September 2009
what if apply for approval of C.G later on ?
01 September 2009
You have to file application for compounding the offence under section 621A along with application to CG.
01 September 2009
can u please explain the process in details how to make application for compounding an offence ?
03 August 2024
Compounding of offenses under Section 621A of the Companies Act, 1956 (now Section 441 of the Companies Act, 2013) allows a company to settle certain offenses without going through a trial. This process involves filing an application with the Central Government (CG) for compounding. Here’s a detailed guide on how to make such an application:
### **1. Understand the Offense**
- **Determine Eligibility:** Ensure that the offense you wish to compound falls under the categories permissible for compounding. Not all offenses are compoundable; typically, they are minor violations of the Companies Act.
### **2. Prepare the Application**
#### **2.1. **Draft the Application:**
- **Application Format:** The application should be drafted in a formal letter format addressed to the Regional Director (RD) or the appropriate authority under the Ministry of Corporate Affairs (MCA).
- **Details to Include:**
- **Company Details:** Name, registered office address, CIN (Company Identification Number), etc.
- **Details of the Offense:** Brief description of the offense, date of commission, and the relevant section of the Companies Act under which the offense falls.
- **Reason for Compounding:** Explain why you are applying for compounding and provide any supporting documentation.
- **Compounding Fee:** Indicate whether the compounding fee has been paid or will be paid.
#### **2.2. **Documents Required:**
- **Copy of the Offense:** A copy of the order or report evidencing the offense.
- **Resolution of the Board:** A board resolution approving the decision to apply for compounding.
- **Application Fee:** A demand draft or proof of payment of the compounding fee, as prescribed by the MCA.
- **Proof of Payment of Fees:** Evidence of payment of any penalties or additional fees.
- **Other Supporting Documents:** Any other documents or forms required by the MCA or specific to the offense.
### **3. Submit the Application**
#### **3.1. **Online Filing:**
- **MCA Portal:** Log in to the MCA portal and file the application using the appropriate form (e.g., Form 24A under the Companies Act, 1956, or its equivalent under the Companies Act, 2013).
- **Upload Documents:** Upload the necessary documents and submit the application online.
#### **3.2. **Physical Submission:**
- **Submit Hard Copies:** Along with the online submission, submit hard copies of the application and supporting documents to the Regional Director or the appropriate authority if required.
### **4. Follow-Up and Communication**
- **Acknowledgment:** Obtain an acknowledgment receipt for the application.
- **Clarifications:** Be prepared to provide additional information or clarification if requested by the authorities.
- **Compliance:** Ensure compliance with any directives or conditions imposed by the authorities in the course of processing the application.
### **5. After Compounding**
- **Receipt of Order:** Once the application is processed and approved, you will receive a compounding order from the authorities.
- **Compliance with Order:** Adhere to any conditions specified in the compounding order and ensure that any penalties or fees are paid.
### **Additional Points:**
- **Legal Advice:** It is advisable to consult with a company secretary or legal expert to ensure that all aspects of the application are correctly handled.
- **Regulations and Guidelines:** Stay updated with the latest regulations and guidelines issued by the Ministry of Corporate Affairs as procedures may evolve.
### **Summary**
1. **Understand the Offense:** Ensure the offense is compoundable.
2. **Prepare the Application:** Draft the application, gather necessary documents, and prepare the compounding fee.
3. **Submit the Application:** File online and/or submit hard copies to the Regional Director.
4. **Follow-Up:** Monitor the application and provide additional information if required.
5. **After Compounding:** Comply with the compounding order and directives.
This process will help you manage and resolve minor offenses efficiently while ensuring compliance with legal requirements.
### **1. Understand the Offense**
- **Determine Eligibility:** Ensure that the offense you wish to compound falls under the categories permissible for compounding. Not all offenses are compoundable; typically, they are minor violations of the Companies Act.
### **2. Prepare the Application**
#### **2.1. **Draft the Application:**
- **Application Format:** The application should be drafted in a formal letter format addressed to the Regional Director (RD) or the appropriate authority under the Ministry of Corporate Affairs (MCA).
- **Details to Include:**
- **Company Details:** Name, registered office address, CIN (Company Identification Number), etc.
- **Details of the Offense:** Brief description of the offense, date of commission, and the relevant section of the Companies Act under which the offense falls.
- **Reason for Compounding:** Explain why you are applying for compounding and provide any supporting documentation.
- **Compounding Fee:** Indicate whether the compounding fee has been paid or will be paid.
#### **2.2. **Documents Required:**
- **Copy of the Offense:** A copy of the order or report evidencing the offense.
- **Resolution of the Board:** A board resolution approving the decision to apply for compounding.
- **Application Fee:** A demand draft or proof of payment of the compounding fee, as prescribed by the MCA.
- **Proof of Payment of Fees:** Evidence of payment of any penalties or additional fees.
- **Other Supporting Documents:** Any other documents or forms required by the MCA or specific to the offense.
### **3. Submit the Application**
#### **3.1. **Online Filing:**
- **MCA Portal:** Log in to the MCA portal and file the application using the appropriate form (e.g., Form 24A under the Companies Act, 1956, or its equivalent under the Companies Act, 2013).
- **Upload Documents:** Upload the necessary documents and submit the application online.
#### **3.2. **Physical Submission:**
- **Submit Hard Copies:** Along with the online submission, submit hard copies of the application and supporting documents to the Regional Director or the appropriate authority if required.
### **4. Follow-Up and Communication**
- **Acknowledgment:** Obtain an acknowledgment receipt for the application.
- **Clarifications:** Be prepared to provide additional information or clarification if requested by the authorities.
- **Compliance:** Ensure compliance with any directives or conditions imposed by the authorities in the course of processing the application.
### **5. After Compounding**
- **Receipt of Order:** Once the application is processed and approved, you will receive a compounding order from the authorities.
- **Compliance with Order:** Adhere to any conditions specified in the compounding order and ensure that any penalties or fees are paid.
### **Additional Points:**
- **Legal Advice:** It is advisable to consult with a company secretary or legal expert to ensure that all aspects of the application are correctly handled.
- **Regulations and Guidelines:** Stay updated with the latest regulations and guidelines issued by the Ministry of Corporate Affairs as procedures may evolve.
### **Summary**
1. **Understand the Offense:** Ensure the offense is compoundable.
2. **Prepare the Application:** Draft the application, gather necessary documents, and prepare the compounding fee.
3. **Submit the Application:** File online and/or submit hard copies to the Regional Director.
4. **Follow-Up:** Monitor the application and provide additional information if required.
5. **After Compounding:** Comply with the compounding order and directives.
This process will help you manage and resolve minor offenses efficiently while ensuring compliance with legal requirements.
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