Loan from director

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 October 2013 Hello everyone

please clarify can a public limited company take loan from its directors?

thanka on advance

Ajay Mishra

Ajay Mishra (Expert)
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10 October 2013 Hi

You are talking under New Companies Act, 2013 or under Companies Act, 1956.

Querist : Anonymous

Querist : Anonymous (Querist)

10 October 2013 both for compliance

Ajay Mishra

Ajay Mishra (Expert)
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10 October 2013 Under the Companies Act, 1956:

The company is permitted to take loan from its director and it will not be covered under section 58A.

Companies (Acceptance of Deposits) Amendment Rules, 2004.-

1.Short Title and Commencement - (1) These rules may be called the Companies (Acceptance of Deposits) Amendment Rules, 2004.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In rule 2 of the Companies (Acceptance of Deposits) Rules, 1975, in clause (b), for sub-clause (ix), the following sub-clause shall be substituted, namely:-

" (ix) any amount received from a person who, at the time of the receipt of the amount, was a director of the company or any amount received from a relative of a director or its member by a private company :

Provided that the director, relative of a director or member, as the case may be, from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting from others".

After this amendments in this rule as on 12/03/2004 the public company can take money from its director because the word private company has been replace in this sub clause by the word “ the Company”.

Ajay Mishra

Ajay Mishra (Expert)
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10 October 2013 In Section 73 of the new Companies Act, 2013 there is not given permission to accept a loan from its director, so as per my opinion if you take loan from directors then it will not be a deposit and you can take a loan from director.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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10 October 2013 Agreed with expert.

Querist : Anonymous

Querist : Anonymous (Querist)

10 October 2013 thanks Ajay Sir

please clarify is there any requirement to file any return

loan from director has been taken in the year 2012-13 what are the compliances

Ajay Mishra

Ajay Mishra (Expert)
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10 October 2013 No need to file any return.

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