Company's act - 58 a

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Querist : Anonymous

Querist : Anonymous (Querist)

26 August 2013 Dear all,

I would like to know that if company availed deposits from partnership firm under which only one partner is relative .. thn is it violation of 58 -A Company's act or not? I have confusion regarding the same.

Please also inform cousin is relative as per company's Act.

Thanking You

Ajay Mishra

Ajay Mishra (Expert)

26 August 2013 Hi

Deposits from Partnership firm
Acceptance of deposit by a private company from a partnership firm:—
(a) If all partners of the firm are also the directors of a private company, such private company can accept unsecured loans/deposits from the firm. This case will be covered under rule 2(b)(ix) i.e. such a deposit is an exempted deposit.
(b) If all partners of a firm are not the directors of a private company i.e. some of them are the directors and remaining are the shareholders, still private company can accept deposit from the firm.
(c) If all partners of a firm are not the directors of a private company i.e. some of them are the directors, some of them are shareholders and remaining are relatives of a partners who is a shareholder. This case is not covered under rule 2(b)(ix).
(d) Where some partners are directors in a private company and remaining partners are not their relatives, private company cannot accept deposits from such firm.

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