Repayment of share application money & advance paid to direc


This query is : Resolved 

15 December 2011 1.One private limited company deals in resorts business does not start its business . it only starts purchasing land & building. It paid advance to its directors. is there any legal problem in that. whether advance paid to directors considered as dividend or not?

2. A private limited company accepts share application money from its existing directors. but unable to issue shares. so the company repay the money to directors. IS there any legal problem in that

Parashar (Expert)
16 December 2011 1. Check the provisions of section 2(22)(e) of IT act that whether it comes in deemed dividend.

2. There is no problem the company can refund the application money to the directors.


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