Loan from director.

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Pavan Mundra (Querist)
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04 March 2016 One director had given loan to company say ex amount in 2013 and later in 2015 the director resign from directorship. And company does not repay his loan. It was still standing in the books. Is this breaching any compliance as per CA,2013. If so what is the remedy to it. And how much amount can company take loan from director. Is there any restriction on it.

Pratik Shah

Pratik Shah (Expert)
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09 March 2016 No. It is not violation of any provisions of Companies Act, 2013.

Further, Company can take loan from Director without any limit. Please refer Deposits definition for the same.

Pavan Mundra

Pavan Mundra (Querist)
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18 March 2016 Sir, suppose the directors at the time of giving loan to company are the share holders also. and later cease to be a director.

Pratik Shah

Pratik Shah (Expert)
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18 March 2016 No problem. Since they were the directors at the time of giving loan (irrespective of they are shareholders or not), deposit rules won't be applicable to such amount.

Pavan Mundra

Pavan Mundra (Querist)
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21 March 2016 Sir, As per Companies Act 2013 if the director is a shareholder also then, Section 73(2) read with Companies (acceptance of deposit) rules 2014 would be applicable or not. Please advise.

Pratik Shah

Pratik Shah (Expert)
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24 March 2016 No..it would not be applicable. As far as a person who is giving money is Director at the time of giving, it will come under exemption, irrespective of whether he is shareholder or not.

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