Can a pvt.ltd. company loss set off with directors loan

[Ramesh Prasad]

Dear All Expert,

ABC pvt. ltd. company have loss ₹ 50,00,000 and Directors loan outstanding ₹ 40,00,000.Can we set off the loss with directors loan and carry forward the loss ₹ 10,00,000 (50,00,000 - 40,00,000).What are related sections of company laws in this regard.

AI Summary

Can a Company Offset Financial Loss Against Director's Loan? Expert Says No Under Company Law. A private limited company, referred to as ABC, has a financial loss of 50,00,000 and an outstanding director's loan of 40,00,000. The query raised is whether the company can offset the loss against the director's loan, thereby carrying forward a remaining loss of 10,00,000. An expert responded, stating that in their opinion, such a set-off is not permissible under company law. The discussion seeks clarification on the relevant sections of company laws applicable to this scenario.