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Loan Given by Director To Company

Tejas shah (Sweeper) (163 Points)

23 September 2019

If during last FY director has given any loans to co. than, is Co. required to pay director any interest on the same??

The director has given money out of his own funds...

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6 Replies

Nikeeta Bahar (43 Points)
Replied 23 September 2019

Yes The company has to Pay Interest otherwise CARO Reporting will be made. and The Auditor May Qualify due to Significant Transaction.

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Tejas shah (Sweeper) (163 Points)
Replied 23 September 2019

But law does not specifically provide that.. than on what basis it is to be calculated and how much interest %???

Nikeeta Bahar (43 Points)
Replied 24 September 2019

Will you tell me whether the Company is Pvt. or Public/listed..??
Because If CARO Not Applicable... then NO PROBLEM 😊

Tejas shah (Sweeper) (163 Points)
Replied 24 September 2019

Co. is Pvt ltd co. and CARO is applicable to it..

Can you even tell me the section or proviso or any other significant rule where is it is mandatory to pay interest

Jatin Bajaj (CS) (2930 Points)
Replied 24 September 2019

The amount given by the Director to the Company is treated as Loan which shall be repaid along with the interest.

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Tejas shah (Sweeper) (163 Points)
Replied 24 September 2019

@ Jatin but section is silent.. it specifies only declaration is enough from director...

Can you pls provide me the link, case law or any reference...

The reason being there are mixed reviews...