Debt remission and extra time have their own approval limb
For a company to which section 180 applies, subsection (1)(d) requires company consent by special resolution before the Board exercises the power to remit, or give time for repayment of, any debt due from a director. This guide, checked on 27 October 2026, uses ordinary non-exempt public-company examples. It does not treat every private or specially exempt company as subject to the same rule. Companies Act section 180(1)(d) and class-exception notes.
Do not use borrowing headroom as waiver authority
Section 180(1)(c) concerns the company’s borrowings; subsection (1)(d) concerns a director’s debt to the company. A special resolution authorising the company to borrow up to a stated ceiling does not by that fact authorise remission of director debts. Identify the actual power, debtor, amount and decision being proposed. Companies Act section 180(1)(d) and class-exception notes.
Establish the debt before describing the concession
Reconcile the original obligation, actual receipts, interest or other independently established amounts, credits and outstanding balance. Determine whether the proposal writes off a collectible debt, compromises it, or merely extends the payment time. An accounting impairment or provision is not automatically legal forgiveness. Equally, calling an extension a collection arrangement does not answer whether time for repayment is being given. Companies Act section 180(1)(d) and class-exception notes.
State the proposed consent precisely
The supporting papers should distinguish principal waived, interest waived, amounts retained, revised dates and any conditions. Preserve the special resolution actually covering the proposal and the Board action implementing it. The provision refers to any director debt; do not import the 20% undertaking test or the borrowing-limit formula into this separate limb. Applicable meeting, disclosure and filing obligations need independent compliance. Companies Act section 180(1)(d) and class-exception notes.
Other statutory questions remain
Consent under this limb does not by itself validate the original loan under section 185, determine related-party or other approvals, establish directors’ duties compliance or settle tax treatment. Review the relevant facts and provisions separately. For an exemption claim, examine current class conditions and the actual company rather than relying only on its name or a copied precedent. Companies Act section 180(1)(d) and class-exception notes.
Close both legal and financial records
Match the valid decision with the director ledger and any revised repayment terms. Separate cash repayments from non-cash remission and avoid recording the same reduction twice. Retain unresolved or conditional amounts as such until the actual conditions and accounting requirements are addressed. The following illustrations assume established debts and focus on the proposal’s amounts, not an assurance that any particular waiver is lawful. Companies Act section 180(1)(d) and class-exception notes.
Applicable primary references
Companies Act section 180(1)(d) and class-exception notes
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: Partial principal remission
An established director debt is ₹1,00,000. Proposed remission is ₹30,000, leaving ₹70,000. The papers should identify both the proposed concession and the balance, with the required special consent independently addressed.
Illustrative example 2: Time extension without remission
An established ₹60,000 debt is due 31 October 2026. A proposed 60-calendar-day extension, calculated from that date, gives 30 December 2026. Principal remains ₹60,000; extra time is a separate section 180(1)(d) issue even without reduction.
Illustrative example 3: Interest-only proposal
Established principal is ₹1,00,000 and separately established interest ₹10,000. A proposed waiver of the interest leaves ₹1,00,000 from the ₹1,10,000 total. Do not describe it as a ₹10,000 principal repayment.
Illustrative example 4: Recognise earlier payment first
Original debt is ₹1,00,000. A genuine ₹25,000 cash repayment reduces it to ₹75,000. Proposed remission of ₹30,000 would leave ₹45,000. The bank receipt and non-cash concession need different references.
Illustrative example 5: Two directors, separate decisions
Director A owes ₹80,000 and B owes ₹1,20,000, totalling ₹2,00,000. An approval proposal must identify whose debt is affected; the combined total is not a statutory waiver threshold or borrowing headroom.
Illustrative example 6: Closing ledger bridge
Opening director debt is ₹2,00,000. Actual cash repayments are ₹50,000 and a validly effective remission of ₹40,000 is separately established. Closing debt is ₹1,10,000, assuming no other movements. Do not also book the remission as cash collected.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Determine company applicability | Class and current exemption conditions |
| 2 | Identify the debtor and debt | Director identity and underlying obligation |
| 3 | Reconcile current outstanding | Principal, interest, receipts and credits |
| 4 | Classify the proposal | Remission or extra repayment time |
| 5 | Separate borrowing authority | Correct section 180 limb |
| 6 | Prepare specific consent papers | Amounts, dates and conditions |
| 7 | Verify the special resolution | Actual scope and evidence |
| 8 | Complete separate legal checks | Original loan and other applicable provisions |
| 9 | Implement and record the decision | Board action and revised terms |
| 10 | Reconcile the closing ledger | Cash versus non-cash reductions |
Sixteen practitioner FAQs
1. Which limb concerns a director’s debt to the company?
Section 180(1)(d), where the section applies.
2. Does the limb cover only complete write-offs?
It addresses remission and giving time for repayment; partial proposals need examination too.
3. Can an extension matter without reducing principal?
Yes. Giving time for repayment is expressly addressed separately from remission.
4. Does borrowing consent automatically authorise director debt waivers?
No. Identify the actual scope of the resolution and the different statutory power.
5. Is there a 20% waiver threshold in subsection (1)(d)?
Do not import the undertaking-disposal test into this limb’s reference to any debt due from a director.
6. Do these examples apply to every private company?
No. They assume a non-exempt public company; actual exemptions and conditions require review.
7. Does accounting impairment itself forgive a debt?
Not necessarily. Legal remission and accounting measurement are separate questions.
8. What should consent papers identify?
The debtor, outstanding debt, concession, revised terms and conditions.
9. Should principal and interest be separated?
Yes. Identify the legal basis and amount of each component affected.
10. Can a repayment be counted again as remission?
No. Reconcile actual cash receipts before applying a distinct non-cash reduction.
11. Does special consent cure an originally prohibited loan?
Do not assume so. Examine section 185 and other applicable provisions independently.
12. Does this establish the tax treatment of the waiver?
No. Tax consequences require their own applicable-law analysis.
13. Are filing and meeting procedures waived by the calculation?
No. Complete the independently applicable corporate process.
14. Does a proposed concession immediately reduce the ledger?
Do not assume effect before actual conditions, authority and accounting requirements are satisfied.
15. What evidence distinguishes extra time from repayment?
The revised due-date terms versus an actual receipt and discharge record.
16. What is the closing review control?
One bridge separating opening debt, cash receipts, valid concessions, other movements and outstanding amounts.
Conclusion
Review director debt remission and repayment extensions under section 180(1)(d), separating special consent, borrowing authority, cash repayments and outstanding balances.