Section 208 - payment of interest out of capital
praveen (Chartered Accountant) (6971 Points)
18 February 2011
praveen (Chartered Accountant) (6971 Points)
18 February 2011
CA Sumat Singhal
(Credit Analyst/ Financial Services/ Accounts & Finance)
(3677 Points)
Replied 18 February 2011
Power of company to pay interest out of capital in certain cases.—
(1) Where any shares in a company are issued for the purpose of raising money
to defray the expenses of the construction of any work or building, or the
provision of any plant, which cannot be made profitable for a lengthy period, the
company may—
(a) pay interest on so much of that share capital as is for the time being paidup,
for the period and subject to the conditions and restrictions
mentioned in sub-sections (2) to (7); and
(b) charge the sum so paid by way of interest, to capital as part of the cost of
construction of the work or building, or the provision of the plant.
(2) No such payment shall be made unless it is authorised by the articles or
by a special resolution.
(3) No such payment, whether authorised by the articles or by special
resolution, shall be made without the previous sanction of the Central Government.
regards, sumat singhal
Live class on PF & ESI Enrollment & Returns Filing(with recording)
CAclubindia
