Companies act
This query is : Resolved
Abdul Salam
(Querist)
10 January 2020
what is the ceiling limit for a company to borrow loans from a bank
Devershi Gupta
(Expert)
11 January 2020
There is no limit for a private Company.
In case of public Company sec.180 (1) (c) of companies act, 2013 provides that total of money proposed to be borrowed and money already borrowed shall not exceed aggregate of companies paid-up share capital, free reserves and securities premium (as per latest audited balance sheet).
Any temporary loan taken from company's banker in ordinary course of business will not be considered for this limit.
If company desires to borrow above this limit it is required to pass a special resolution in a general meeting.
In case of public Company sec.180 (1) (c) of companies act, 2013 provides that total of money proposed to be borrowed and money already borrowed shall not exceed aggregate of companies paid-up share capital, free reserves and securities premium (as per latest audited balance sheet).
Any temporary loan taken from company's banker in ordinary course of business will not be considered for this limit.
If company desires to borrow above this limit it is required to pass a special resolution in a general meeting.
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