banhi (CA student) (62 Points)
08 March 2016Hi, our hospital wants to pay against one medical instrument billed in name of our doctor who is also our director. From his professional fees we are intending to adjust the initial payment. How to treat it? Will it be umder loan to director prohibited under C.A.Act. 2013
CS Mangesh M More
(Company Secretary)
(66 Points)
Replied 15 March 2016
Dear Banhi,
As per circular issued on 5th June 2016, Section 185 (Loans to Director) is partially exempted to Private Companies. However please check this below three criteria for exemption to private companies as follows,
a) in whose share capital no other body corporate has invested any money;
b) if the borrowings of such a company from banks or financial institutions or anybody corporate is less than twice of its paid up share capital of fifty Crore rupees, whichever is lower ; and
c) such a company has no default in repayment of such borrowings subsisting at the time of making transactions under this section.
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