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Investing personal funds into company
02-May-2023 (In Corporate Law)
Hello, I have incorporated a company with Rs. 1 lac authorised capital. I have also opened a bank account by transferring Rs. 1 lac from the directors (in the ratio of their equity holding in the company). My question is that now if I want to put money into the company to meet expenses, what is the best option? 1. Should I transfer from my personal account to the company account and show it as a loan to the company? 2. Should I transfer more money from the directors' accounts to the company accounts and show it as equity? What are the pros and cons for both of the above? Thanks
If the amounts to be provided are in the form of small incremental tranches then I would recommend the option of making a loan to the company with the right to convert into equity in the future, at the time of making individual loan amounts.
If the amount to be provided to the company is a large amount I would recommend doing an actual issuance of shares.
Do get in touch for further details.
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Adv. Aditya Shamlal
Delhi | 25+ Answers
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hope that gives you a fair idea about funding. further for more clarification provide the existing structure of the company.
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Adv. Vivek Pathak
Delhi | 25+ Answers
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