Provisions relating to directors

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R.S.Vishnu Kumar (Querist)
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29 August 2009 i need provisions relating to following situation in the companies act,1956 i.e. sec no. and also case laws if any.

situation is:

5 members have formed a private ltd company and subscribed capital. they have opened bank account for the company. they have entered into agreement with one real estate agent and transferred the funds from the company bank account for the purchase of land. Agreeement was finalised and land was purchased but it was registered in the personal names of directors instead of company name.

This is the problem now. i know it is prohibited under companies act but i do not know under what sec it was prohibited.

Please help me out to sort out this issue. suggest the ways if any to make directors come out of this issue. it would be helpful if someone can quote case laws also.

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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30 August 2009 Eventhough the company has paid the money, you have to check the abstract balance sheet as on the date of transfer.

Prepare a abstract balance sheet and profit and loss account.

Based on the abstract balance sheet and profit and loss account you have to take a deecsiion.

The above situation is not at all a problem . You have to work out the strategy prudently.

After preparing the above balance sheet and P&l you can send the details to my id sahanaseena@gmail.com then i can solve the problem.