Can a Director of the Pvt. Ltd company be paid rent at the beginning of each month? Does it conflict with the advance payment clause for directors in Company Act 2013?
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 27 April 2016
Sec.185 of Companies Act 2013 prohibits giving loans to directors. 'Advance' again supply of goods or services is not loan if it is in the normal course and usual trade practice. In your case also it can be argued accordingly provided it is a genuine transaction and premises have been in fact used by the company till the month end.
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