Can pvt ltd borrrow from 3rd party ? from non-director non-shareholder?

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Kunjan (Querist)

05 November 2025 can pvt ltd borrow from completely 3rd party?
can pvt ltd co borrow from non-member, and non director ?

MY VIEW--> yes , but not sure.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

05 November 2025 Private limited companies can borrow from directors and, since a 2015 amendment, from relatives of directors, with proper declarations that the funds are not borrowed themselves.

Such companies may borrow from shareholders but only within limits and with compliance—typically up to 100% of paid-up capital and free reserves, plus additional approvals if this threshold is exceeded.

Borrowing from individuals who are neither directors, shareholders, nor relatives (i.e., completely third parties) is classified as accepting a "deposit" from the public. This is generally prohibited unless the deposit rules are followed, which involves strict compliance with circulars, insurance, credit ratings, and trustee appointments. Most private companies avoid these rules due to the regulatory burden.

The company can, however, freely borrow from banks and registered financial institutions, which are not considered "third parties" in the context of the deposit rules.

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