Hi all,
If a director happens to be a shareholder in the company, will loans taken from the director be treated as deposit under the new act, CA 2013 ?
What is the treatment of such loans if it is a pvt company ?
Regards,
Geetha
Geetha Gupta (Accountant) (325 Points)
01 October 2014Hi all,
If a director happens to be a shareholder in the company, will loans taken from the director be treated as deposit under the new act, CA 2013 ?
What is the treatment of such loans if it is a pvt company ?
Regards,
Geetha
Jaikishan
(CA)
(168 Points)
Replied 01 October 2014
any amount received from a person who, at the time of the receipt of the amount, was a director of the company:
Provided that the director from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others
Hence, declaration from directors is mandatory to consider it exempted deposit.
In case this declaration is not asked for, anyone can lend money through directors and every money borrowed will be exempted, which is not the intention of law.
private companies can accept loans from shareholders subject to compliance of section 73 and deposit rules, 2014.
Landmark Judgments: Important Provisions of the EPF & ESI Act interpreted by the Honorable Supreme Court of India