Loan from directors-section 8 company

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DUSMANTA BARICK (Querist)

12 January 2016 Dear experts,

Can the Directors of a Section 8 Company having paid up capital of Rs 2 crores give interest free loan to the Company? if yes then what are the compliances required for the same.

Please reply.

CS Divesh Goyal

CS Divesh Goyal (Expert)

12 January 2016 As per Section 73 Company can take loan from the Directors if the money is directors own fund.
Director can give only from its own funds not from the borrowed funds.

First Check whether the fund is belong to director itself.
If belong to director then pass BR for borrowing u/s 179(3) and check the limit of borrowing u/s 180 also.

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DUSMANTA BARICK

DUSMANTA BARICK (Querist)

12 January 2016 Thanks Divesh,
but my doubt is, is there any restriction under CA, 2013 (or RBI restriction) to give loan interest free loan to the both Section 8/ or Private Company?

Thanks in advance..

CS Divesh Goyal

CS Divesh Goyal (Expert)

13 January 2016 There is no restriction to loan to Private Company and acco to me also no restriction for section 8 Company.

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