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Can a shareholder of pvt ltd company take advances or loans

Rakesh (Director) (32 Points)

28 September 2012

Can some one guide me: Can a shareholder of private limited company take advances or loans.. if yes then what is format of passing resolution..

please guid on above at earliest.

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4 Replies

CA AYUSH AGRAWAL (Kolkata-Pune-Mumbai) (26986 Points)
Replied 28 September 2012

Yes, He Can Take Loan Advance as Far as Companies Act is Concerned.

But Under Income Tax Act, It Shall be Deemed as Deemed Dividend u/s 2(22)(e).

& Taxable to Shareholder as Income.

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CA Manish (Job) (5264 Points)
Replied 28 September 2012

Originally posted by : CA AYUSH AGRAWAL
	Yes, He Can Take Loan Advance as Far as Companies Act is Concerned. But Under Income Tax Act, It Shall be Deemed as Deemed Dividend u/s 2(22)(e). & Taxable to Shareholder as Income.

Provided that the Shareholders holds not less than 10% of the voting power. If a share holder holds less than 10% of voting power than it wont be considered as deemed dividend.

Correct me if i am wrong.

CA AYUSH AGRAWAL (Kolkata-Pune-Mumbai) (26986 Points)
Replied 28 September 2012

Originally posted by : CA Manish Malu
	Originally posted by : CA AYUSH AGRAWAL Yes, He Can Take Loan Advance as Far as Companies Act is Concerned. But Under Income Tax Act, It Shall be Deemed as Deemed Dividend u/s 2(22)(e). & Taxable to Shareholder as Income. Provided that the Shareholders holds not less than 10% of the voting power. If a share holder holds less than 10% of voting power than it wont be considered as deemed dividend. Correct me if i am wrong.