Loan bid by pvt ltd company from outsider for fixed assets

Save Share

This query is : Resolved

Rupinder Singh (Querist)
Follow

23 September 2013 Dear Sirs,

A privte ltd company wants to get money from outsiders for capital expenditure to be done in its showrooms.....can the company accept this money ?

Outsider means who is neither a director nor a relative and further not a memeber of the company....

Ajay Mishra

Ajay Mishra (Expert)
Follow

23 September 2013 Generally Not. You can take from financial Institution.

Private Company is prohibited to accept any invitation or acceptance of unsecured loans/deposits from the persons other than its members, directors or their relatives. Therefore a private company can accept deposits through private arrangement from its members, directors and their relatives.

Rule 2(b)(ix) exempt any unsecured loan money received from directors and shareholders from the definition of deposits. According to Rule 2(b)(ix), any amount received from members of a private company limited by guarantee are not exempt.

Rule 3 of Companies (Acceptance of Deposits) Rules, 1975 deal with the limit upto which a company can accept deposits/ loans. Private company exempted this limit.

For any invitation and acceptance of unsecured loan/deposits from relatives of directors and member, the company will have to file a statement in lieu of advertisement in accordance with the provisions of Rule 4A of the Companies (Acceptance of Deposits) Rules, 1975. The company will also have to file annual return of deposits in accordance with Rule 10.

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