Deposits

This query is : Resolved

Rajeswar (Querist)
Follow

13 October 2009 A private limited company has accepted unsecured loans from the relatives of the shareholders.does it amount to violation of Sec 58A ans Sec. 3(1)(iii) of Cos. Act, 1956?

Ankur Garg

Ankur Garg (Expert)
Follow

13 October 2009 Hi,

LOAN FROM INDIVIDUALS/OUTSIDERS

Kindly appreciate, A private limited company can take unsecured loan from its shareholders, directors and their relatives and the same would not be covered under section 58A and other deposit provisions as such transaction is exempt by deposit rules 1975.

But if a private company take unsecured loans from persons other than its shareholders, directors and their relatives the same would be considered as deposit under section 58A read with Companies (Acceptance of Public Deposit) Rules, 1975.

Regards

Ankur Garg

Ankur Garg (Expert)
Follow

13 October 2009 But the above exemption is not available to you because deposit rules exempts a private company when it accepts loan from relative of director.

But your company have accepted loan from the relatives of the shareholders. Hence in your company this amount would be treated as public deposit and against the Sec. 3(1)(iii) of Cos. Act. Be careful as it is a violation of Sec. 3(1)(iii) of Cos. Act.

Regards

Rajeswar

Rajeswar (Querist)
Follow

13 October 2009 Thanks for ur reply

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Ashok Atluri

T.N.Reddy

Jagadeesh GR

Arvind Sharma

Taxlet

Subscribe Now

Deposits

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Manager- Finance and Compliance

CA Final

Article Assistant

GST CONSULTANT

GST CONSULTANCY

Accountant