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Corporate law

Girish Kumar SN (Accounts Manager) (28 Points)

18 November 2009

Hi Friends,

Whether MD or any Director of private/public limited company can have transaction in the books of the company involving matters others than salary to directors, infusion of shares capital and perqs as allowed in the IT Act and Company's Act. if so under which section it comes.

Please get me the answer to this question by email : gk1274 @ gmail.com

Thanking you,

Girish Kumar s n

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4 Replies

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 18 November 2009

Not able to understand your query. What do you mean by “can have transaction”? Please explain.

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Girish Kumar SN (Accounts Manager) (28 Points)
Replied 18 November 2009

The very meaning is that whether any managing director or director can have a account like any other creditor having transaction of making expenses on behalf of the company and payment made from his personal account and the same is recorded in the books of accounts of the company.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 18 November 2009

As per my understanding a director can pay valid expenses on behalf of the company and later on company can reimburse the same to the director. Proper record of such transactions should be kept and it is not advisable to show directors’ name in the creditors’ list on regular basic. So settle the transaction as early as possible.