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Private Limited Company Loan

kings22 (Shareholder) (166 Points)

13 May 2020

Dear Experts -

We had a shareholder in the Private Limited company who had given some loan to the company (~Rs 13.5 lacs). This shareholder now has transferred their share and are no longer shareholder or Director in company. The loan continues to be on the books.

Questions

- Is there any issue if the loan from previous shareholder continues on the books ? Is this with-in MCA guidelines?

- This person due to legal issue with government is unable to operate a bank account - is it fine if we return this slowly as cash to them and what documentation do we need to put together if we do that. Thank you for your guidance. Sameer

- What are some other ways to close this loan?

Thank you

Sameer

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2 Replies

Asha Kanta Sharma (Manager - Finance & Accounts) (36355 Points)
Replied 16 May 2020

- Is there any issue if the loan from previous shareholder continues on the books ? Is this with-in MCA guidelines? = There should not be any issue as far as I know. - This person due to legal issue with government is unable to operate a bank account - is it fine if we return this slowly as cash to them and what documentation do we need to put together if we do that. Thank you for your guidance. Sameer = You can not replay loan in cash if the amount of loan if more than Rs. 20,000/- Sections 269SS & 269T of Income Tax - Repayment of Loan: The aggregate amount of loans or deposits, including the interest amount, held by such person in his own name, or jointly with any person, is Rs. 20,000 or more. In nutshell, a person cannot repay the loan or deposit in cash, if the amount is Rs. 20,000 or more.