what are the consequences if a company accepts a loan from its directors, or a company pays for the loan taken by its directors
CA Sahil Singla..
(Service Tax )
(3746 Points)
Replied 07 December 2010
there is no problem if Co. takes loan from the directors..but if Co. pays for Directors loan then i think this is not the genuine entry
CA. MUKESH KUMAR
(CHARTERED ACCOUNTANT)
(183 Points)
Replied 07 December 2010
If company pays loan of its directors and director have substantial interest then may attract section 2(22)(e). If company received loan from directors then there is no problem in the eyes of law.
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