James Cruz (Accountant) (32 Points)
21 October 20101. CAN A PRIVATE LIMITED COMPANY ISSUE SHARES TO CERTAIN PROMOTERS BY CREDITING SUCH AMOUNTS TO LOAN ACCOUNTS ? ( CAN SHARE CAPITAL BE ISSUED WITHOUT PHYSICALLY RECEIVING MONEY BY KEEPING SUCH MONEY AS RECEIVABLES IN RESPECTIVE LOAN ACCOUNT IN BOOKS )
2. CAN SUCH LOAN ACCOUNTS BE WRITTEN OFF ?
3. WHAT WILL PROMOTER BE LIABLE TO INCOME TAX ? IF SUCH RECEIVABLE IS WRITEEN OFF BY THE COMPANY ?
Ajay Mishra
(Company Secretary)
(74337 Points)
Replied 22 October 2010
Hi
A company can received loan from its promoters there is no restriction.
Yogesh Shah
(Managing Corporate Finance)
(1051 Points)
Replied 22 October 2010
HI James,
As per my opinion, you cannot do so. Co can't credit share capital account if no money (i.e. either call money or capital) is received.
I am answering this with reference to journal entries I have learned. However, other valuable views are awaited.
Live Course on Invoice Management System (IMS) - 2nd Batch(With Recording)
CAclubindia
