RITU BAJAJ (COMPANY SECRETARY) (158 Points)
06 April 2010Plz advice me whether office rent can be paid to a director of a pvt. ltd. company? If yes, which section gets attracted? Does any approval from shareholders is required or just an agreement between the director and company will do? Plz answer my query. Its urgent.
C.A.Harish Singh
(CHARTERED ACCOUNTANT)
(201 Points)
Replied 06 April 2010
I Think just an agreement between the director & company is enough but TDS liabilities arise if Rent paid is more than 120000 in a year For F.Y. 2009-10 and 180000 for F.Y.2010-11. and it also covered under service tax.
| Originally posted by : RITU BAJAJ | ||
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Plz advice me whether office rent can be paid to a director of a pvt. ltd. company? If yes, which section gets attracted? Does any approval from shareholders is required or just an agreement between the director and company will do? Plz answer my query. Its urgent. |
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Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 06 April 2010
Simply prepare a rent agreement and get it approved from BOD through a board resolution. Take care of section 299 and 301. Entry in 301 register is necessary.
Regards
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 06 April 2010
Extra care is needs to be taken for this kind of transaction in a public company due to section 295-Loan to director. A real rent agreement supported by BM resolution is necessary to be maintained in records of the company to deal with the situation where question raised by ROC u/s 295 during investigation of the company affairs.
CS Jithesh (ACS,)
(COMPANY SECRETARY )
(485 Points)
Replied 09 April 2010
If the rent agreement is not prepared and lessor - lesse relationship is not created then Deedmed Dividend concept will also attract for the Director
Rgds
CS Jithesh
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CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 10 June 2010
Dear Ritu Ji,
There is no problem, just prepare a rent agreement, make entry in the register u/s 301 and pay rent to the directror. And ofcourse the Rent is subject to TDS as described by Mr. Harish.
khushboo
(CS)
(234 Points)
Replied 11 June 2010
Whether office rent can be paid to a director's HUF in a pvt ltd. company by passing a Board Resolution and Agreement between Company and Director's HUF.
and how Income Tax attracts its.
Plz guide
Rahul Agrawal
(Company Secretary)
(22 Points)
Replied 02 May 2014
IF rent paid to director and its relative, than what would be the answer as per companies act, 2013 and how many compliances will include in this transaction as per income tax act also ?
CAclubindia
