GST Update:

1. If your business turnover is above 5 crores in any of the financial years starting from FY 2017-2018, prepare your business for e-invoice under GST w.e.f 1^st August 2023
2. GST Department has started address verification of registered persons from 16^th May 2023, it will go on up to 15^th July 2023. Ensure your address is updated in GST Portal. Ensure your business board is displayed in the address consisting of Name, GSTN, Address, and CIN (If applicable).

Income Tax Update:

1. International credit card purchases are going to get expensive from July 2023, Department has instructed credit card issuing companies to include 20% TCS on all international payments to track forex payments and for other purposes.
2. Due date for TDS Q4 returns filing is 31^st May 2023, ensure the returns are filed on time for smooth ITR return filing by taxpayers.

Corporal Law Update

1. LLP owners, ensure Form-11 filing within the due date i.e., 31^st May 2023
2. DIR-3 KYC can be started now to avoid last minute rush.
3. DPT-3 Form due date is fast approaching, i.e., 30^th June 2023

Opinion Column

Can a private limited company take a loan from directors to invest in another body corporate such as LLP or another company?

At times entrepreneurs who handle multiple businesses invest in new ventures through their existing companies. They tend to miss certain legal provisions when making such investments, which might be a cause of concern at a future date.

Companies Act does not have specific provisions dealing with loans from directors, however, such loans are treated as exempted deposits. Similarly, there is no provision that talks about the utilisation of the funds received from Directors. Below are a few pointers to note down:

• If the directors have lent money from their own funds, there is no cause for concern, it can be in my opinion used to invest in other businesses.
• If investors lend money out of their borrowed funds, then the provisions of deposits will be attracted and must ensure compliance.

How much money can be invested in other Body Corporates?

• Upto 60% of Paid-up capital + Free Reserves or 100% of Free reserves can be invested without shareholders’ approval, through Board Resolution
• To invest any amount more than the above limit, then express special resolution to this effect must be obtained from the members.
• If the investment is made in an LLP, must appoint a nominee designated partner in the LLP on behalf of the Company.

These are my personal opinion, if any professional has a contrary opinion to the above, feel free to share your thoughts

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