Limit for loan amount
Querist : Anonymous
Please advise me on the following Query :
1} What is the limit of Loan amount a share holder can issue to a private Ltd company
2} Can a Director give loan to a Pvt / Public Ltd Company - if yes then what is the limit of this Loan amount.
3} Can a Director / Share holder borrow & give loan to a Public / Private Limited Company
Please advise ji
Thanking you with regards
Deepak kumarr
9381323258
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 a violation of section 3(1)(iii) of the Companies Act, 1956.
2. there is no limit on Loans taken from directors or shareholders in the case of a private limited company .
3. On the other hand amount taken by public company from individual is not covered in the exemption given by the said rule, hence amount taken by public company from individual is considered as deposit under section 58A read with Companies (Acceptance of Public Deposit) Rules, 1975.
with regards
Querist : Anonymous
Recd your reply & thank you for the same .
One of our friend told that a Pvt Ltd company can take loans from the share holders but to the maximum extent of their own Capital { ie : they cannot give Loan from Borrowed Funds }. If the above rules applies do v have to take any Declaration from the Share holder .
Do the same rule applies for a Director also - Please advise .
Thanking you with best regards
Deepak kumarr
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