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Can pvt. ltd company take loan...?

03 August 2015

dear sir,
Whether Pvt. Ltd. Company can take loan from directors and their relatives as well as from public... its urgent...
kindly clarify...

Regards
Anil Gabel

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2 Replies

CS Rahul Kabra (CS) (141 Points)
Replied 05 August 2015

A Private Company can take Loan from its Directors without following any compliance.

Please note that if a Private Company wants to take a Loan from any person other than its Directors, then the company has to be follow a heavy compliance as stated in Acceptance of Deposit Rules and Section 73 of the Companies Act, 2013.

It is advised for a Private Company to take Loans only from its Directors.

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 05 August 2015

1) Only a public company can accept deposit from public. [Ref.Sec.76(1).]

2) Private company can take loan from directors if the same is not given out of borrowed funds [Ref. Rule 2(1)(c)(viii)].

3) Private company cannot take loans from relatives of directors and public unless same is covered in any of the exclusions specified in Rule 2(1)(c).

4) Private company can take loan from members if conditions of Sec.73(2) read with exemption notification dated 5.6.2015 are compied with.