Harinder (student) (219 Points)
10 January 20113 Active Directors out of Total 5, of a Private Limited company want their outstanding salary during the non-operational period of the company to be converted into the paid-up capital. Further, same Directors are also withdrawing only partial salary for the last 6 months, when the company is successfully engaged in operations.
My query is whether directors can legally do this, and if yes what would be the procedure?
CS MD Osman Akthar
(Company Secretary & CA(Final))
(78 Points)
Replied 10 January 2011
My friend they can do it.
First convert the Outstanding Salary amount to Directors as Loan from the Directors.
Allot the shares to the Directors aginst the Loan Outstanding to the Directors.
take care the compliance of TDS Provisions on Salary.
Hope it may help ! !
Harinder
(student)
(219 Points)
Replied 12 January 2011
| Originally posted by : CS MD Osman Akthar | ||
 |
My friend they can do it. First convert the Outstanding Salary amount to Directors as Loan from the Directors. Allot the shares to the Directors aginst the Loan Outstanding to the Directors. take care the compliance of TDS Provisions on Salary. Hope it may help ! ! |
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Thank you for your reply,
To convert the O/s salary of Director and allot shares to them, what procedures need to be followed. A resolution need to filed in a General Meeting of the share holders???
Advise
CS MD Osman Akthar
(Company Secretary & CA(Final))
(78 Points)
Replied 12 January 2011
Procedure,,
1. Compute the O/Salary and comply the TDS prov
2. Hold a Board Meeting convert the O/S as loan from Directors.
3. By taking consent from the Directors and a Board Resolution for the same allot the shares.
hope it works,,
CAclubindia
