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Funding of esop trust???/

Mayuri Lal (officer CS) (748 Points)

03 August 2011

Dear Members,

Can a Company provide financial assistance directly to the Trust.

What are provisions regarding the funding of a trust. for ESOP

Regards,

Mayuri Lal

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4 Replies

Jaideep (Service) (1368 Points)
Replied 03 August 2011

Yes, direct funding can be done. Refer section 77 for the same. No procedures involved except Board meeting and documentation like MOU...

Regards

Jaideep Pandya

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ravindranth (company secretary) (114 Points)
Replied 04 August 2011

yes funding can be done by the company to the Trust. it will be shown as Loan to the trust in the books of the company. it should be authorised by the board by way of board resolution.

Mayuri Lal (officer CS) (748 Points)
Replied 05 August 2011

Thank you Mr. Jaideep & Mr. Ravindranath

Piyush Jain (Service) (42 Points)
Replied 30 July 2012

Dear JaiDeep,

How the taxation of interest paid by the trust to compnay will be done. Trust will deduct TDS on amount of interest paid. And How the trust will claim the interest as expene in its books as it does not haeany other income.