Acceptance of loan by private limited company

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Querist : Anonymous

Querist : Anonymous (Querist)

28 April 2016 (1) Can a private limited company accept loan from its directors. relatives of directors, friends of directors ?

(2) If yes, can company borrow money in excess of its paid up capital and reserves ?

(3) Any resolution required to be filed with ROC for acceptance of loan?

Pratik Shah

Pratik Shah (Expert)
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28 April 2016 Private Limited Company can accept loan from Directors and relatives of director. It can not do so from Friends of Directors.

Pvt Company can accept loan exceeding its paidup capital and free reserves subject to compliance of Section 180. (I guess, Section 180 is also exempted to Private Companies vide Notification dated 05th June, 2015.

No need to file any documents with ROC.

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KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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28 April 2016 1)Yes Company can accept Deposit as per Companies ( Acceptance of Deposit) Rules 2014,Any amount received from a person who, at the time of receipt of the amount, was a director of the company or a relative of director of a Company . Provided that the director of the company or relative director of Private company as the case may be from the whom money received furnishes to the company at the time of giving Money , A declaration in writing to the effect of that amount is not being given out of funds aquired by him by borrowing or accepting loans or deposits from others and company shall disclose the details of money so accepted in the board of report

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