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Renting of Machinery

10 April 2018

Can a Pvt Ltd Company give Machinery on rent to its directors?

Machine is in the name of Company and On that machine there is 1 Loan also.

answer fast.

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5 Replies

Preeti (Team_GSTSoln) (Team GST Experts) (1926 Points)
Replied 10 April 2018

yes co. can give it , but have to charge gst on the rent amount if co. is registered under gst

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Mrudula (Student CA IPC / IPCC) (20 Points)
Replied 10 April 2018

according to companies act : this becomes a related party transaction u/s 188(1). hence a board resolution must be passed in a board meeting to carry out this transaction. also, if the amount of lease exceeds: 10% or turnover/networth or rs.100 crores (whichever is lower), a resolution in the general meeting is also required to carry out the transaction.

Mrudula (Student CA IPC / IPCC) (20 Points)
Replied 10 April 2018

according to companies act: this becomes a related party transaction u/s 188(1) hence a board resolution must be passed in a board meeting to carry out this transaction. and that director should be present while passing the board resolution. also , if the amount of lease exceeds : 10% of networth / turnover of the company or rs.100 cr (whichever is lower) a resolution in general meeting is also required to carry out this transaction.