sakshi (CS) (261 Points)
22 June 2011Can a director/promoter advance loan to the Company ?If yes which section of the Companies Act will get attracted in the case??Kindly also provide some case lwas, if any.
Kindly also suggest some good sites for case laws on Companies Act, 1956.
Regards
Dipjyoti Majumdar
(CA in service & CS. dipmaj@ rediffmail.com )
(3468 Points)
Replied 22 June 2011
The issue is if a loan given by a D to the co will be treated as deposit within the purview of section 58A read with Rules, 1975.
sakshi
(CS)
(261 Points)
Replied 23 June 2011
As per my knowledge any amount received by a Private Company from its directors shall not be treated as deposits provided he gives a declaration that the amount being adanced by such director to the co is not being procured or borrowed from others.
Please correct me If I am wrong.
And if my interpretation is correct, then please let me know what provisions cover loan advanced by the director to the Company?
Pravin Gupta CS
(trainee)
(789 Points)
Replied 23 June 2011
loan given by a director alwys treated as a unsecured loan not as a deposit... as per Companies (Acceptance of deposit) rules, 1975. loan given by director not to be considered as deposit..
here sec. 292 of companies act will be applicable also sec. 299 and 300.....
Dipjyoti Majumdar
(CA in service & CS. dipmaj@ rediffmail.com )
(3468 Points)
Replied 23 June 2011
section 292 deals with giving of loans from a company to others, not receiving of loans.
you should be careful of interest rates, it should not be abnormal so as to get disallowed in assessments and get qualified from audit viewpoint.
maintain 301 register , comply 299.
CAclubindia
