Loan / Advances From Directors


Anonymous
watch_later 2 years, 8 months ago

A Private LTD Company has taken loans, Advances from directors & directors personal Firms. Now as per Section 73 of Co., Act It will come as deposit since the company's Networth is negative. Kindly suggest me as a Auditor how I can handle this situation ?

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2 Answers

Mukesh Solanki watch_later 1 year, 1 month ago
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You also need to take a declaration from directors that this loan is out of own funds & not out of borrowed funds.

 

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Mukesh Solanki watch_later 2 years, 8 months ago
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I think this gets covered under Co Acceptance of Deposits rules. From the meaning of deposits, Loans taken from Directors are excluded from the definition of deposits as covered u/s 73. Hence a PVT LTD co., can take the loans from directors.

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