Loan to employees

This query is : Resolved

PRIYANKA (Querist)
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15 May 2014 My co. is a listed co.One of the employees of peon level wants an advance of Rs 50,000 from the co.
Whether as per The Companies Act,2013 Board approval is required for granting the advance to employees and what are the new req. in this regard?

Sandeep Dharar

Sandeep Dharar (Expert)
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15 May 2014 No rule is there for advance to employees. The company can approve the loan.

PRIYANKA

PRIYANKA (Querist)
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15 May 2014 The co. can even charge interest on that loan?

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Sandeep Dharar

Sandeep Dharar (Expert)
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15 May 2014 It depends on the Company to charge Interest or not. The Company can also provide interest free loan. But it is better to charge interest. Coz it will result in income of the Company & will also attract TDS so the transaction become secure & the company helps the government by paying taxes.

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