If a director of private limited company pays off companies creditors out of his borrowed funds would that amount to loan to the company by director from his borrowed funds? A company is undergoing financial crunch so is director. Company is not in a position to borrow from outsiders/banks hence director want to borrow fund from a bank and pay off the creditors. Please advise.
Thanks in advance.
If directors provides loan to company out the borrowed funds it shall amount to deposit under Rule 2(viii), companies acceptance of deposits rules, 2014. So need to comply with procedure of acceptance of deposits.
Thanks