Acceptance of deposits

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Abhishek Gemawat (Querist)
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18 December 2012 If a public limited company accerpts unsecured loan from its directors will it amount to "Depsit: under section 58A?

aadish

aadish (Expert)
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18 December 2012 It will be treated as a Loan from related party and not from general public as stipulated in sec 58A, public deposits.
Hope your query is resolved.

Ajay Mishra

Ajay Mishra (Expert)
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18 December 2012 Hi

Amount received from director of public company will not be treated as deposit under section 58A of the Companies Act, 1956.

Ajay Mishra

Ajay Mishra (Expert)
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18 December 2012
Rule 2(B) (ix) of the the Companies (Acceptance of Deposits) Rule, 1975 is defind as follow:

“Any amount received by a private company from a person who at the time of the receipt of the amount, was a director, relative of director or member.”

In exercise of the powers conferred by Section 58A read with sub-clauses (a) and (b) of Sub-section (1) of Section 642 of the Companies Act, 1956 (1 of 1956), the Central Government, in consultation with the Reserve Bank of India, hereby makes the following rules further to amend the Companies (Acceptance of Deposits) Rules, 1975, namely:-

1 . Companies (Acceptance of Deposits) Amendment Rules, 2004.-

1.Short Title and Commencement - (1) These rules may be called the Companies (Acceptance of Deposits) Amendment Rules, 2004.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In rule 2 of the Companies (Acceptance of Deposits) Rules, 1975, in clause (b), for sub-clause (ix), the following sub-clause shall be substituted, namely:-

" (ix) any amount received from a person who, at the time of the receipt of the amount, was a director of the company or any amount received from a relative of a director or its member by a private company :

Provided that the director, relative of a director or member, as the case may be, 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 from others".

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