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As per Rule 2 sub rule 1 clause vii of the Companies (Acceptance of Deposits) Rules, 2014

“Any amount received from a person who, at the time of receipt of the amount, was director of the Company, will be out of preview of Deposits”.

Condition: The director from whom money is received furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others.

S. No.

QUESTION & ANSWERS

A.    

If a company accepting Loan from directors then Which sections will be Attract?

·         Section 179(3)

·         Section 180(1)(c)

·         Rule 2(1)(vii) of Chapter V

B.     

Is there any form required to be file while accepting loan from director?

Form MGT-14 required to file for Loan from Director.

C.    

When Board resolution required passing for acceptance of Loan from Director?

If loan accepting from director along with borrowing already made by Company is within the limit of “Paid up share capital + Free Reserve” then Board Resolution required to be filed u/s 179(3) and form MGT-14 required to be filed with ROC.

D.    

When Special resolution required to be passing for acceptance of Loan from Director?

If loan accepting from director along with borrowing already made by Company is exceeds the limit of “Paid up share capital + Free Reserve” then Special Resolution required to be filed u/s 180(1)(c) and form MGT-14 required to be filed with ROC.

E.     

Is resolution required to file every time when company will borrow money from the director?

No, there is no need every time to pass resolution for acceptance of money from director.

Company can pass a resolution with higher limit at a time whether in

·         Board Meeting – if higher limit doesn’t exceed “paid up share capital + free reserve:

·         General Meeting- if higher limit exceed “paid up share capital + free reserve:

F.     

If Company exceeding the Limit of “Paid up share capital + Free Reserves” then process to accept loan from Director

Step-I- Company will Hold a Board Meeting to call General Meeting.

Step-II- Company will pass a Special Resolution for Higher limit.

Step- III- Company will file MGT-14 for Special Resolution passed in General Meeting.

Step-IV- Company will hold Board Meeting and Board of Directors will pass resolution for acceptance of loan from Director.

Step-V- Company will file MGT-14 for Board Resolution.

G.    

If deposit in the joint name of director and other person then how it will be treated?

A deposit in joint names of director and another person, who may or may not be director, should be permissible, if name of director is first depositor, though there is no specific provision.

AMOUNT FROM DIRECTORS:

Any amount received from a person who was director of the company at the time of receipt of the amount is not ‘deposit’.

Condition: The director should declare in writing that the money he is depositing is not borrowed or accepting loans or deposits from others.


 

Published by

CS Divesh Goyal
(Practicing Compnay Secretary)
Category Corporate Law   Report

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