Rules for a director of pvt ltd co.

pankaj biyani (Querist) 05 December 2014 This query is : Resolved
Sir, We are going to form a pvt ltd co. for that I want to know, how can we arrange fund for doing business of the company. As a director can I give funds to company as loan with interest. If yes,is there any binding on me such as from where I am arrenging the fund.

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Guest (Expert) 05 December 2014
Yours seems to be quite a vague query. Your statement, "We are GOING to form a pvt ltd co," indicates, as if you have not yet formed the company by getting the name and/or the MOA and AOA approved from the ROC and it is yet in the proposal stage. So, where arises the question of arranging funds? A company is formed, as soon as it gets registered with the ROC with approved MOA & AOA. You have not mentioned if all the formalities up to registration stage have already been completed or not.

If not, it is just like asking as if you want to sell a building without buying and acquiring a plot of land, getting prepared any architectural layout plan, getting approval of the plan by the competent authority, arranging for funds for raising the bulding, getting the building raised, getting completion certificate of the competent authority, etc.

So, better get the first things done first. Arranging of funds is secondary issue after formation of the company.

Further, as Director it is your outlook how you can manage to arrange the funds for commencement of business. If you want solution on that issue, you are required to personally consult some expert/CA on the issue, as that issue is a time taking job requiring elaborate personal discussions and cannot solve your problem merely on casual query at LCI. If that issue is solved, the issue of subsequent part of your query would automatically be solved during personal discussions.