Loan from employee

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 December 2016 Dear Experts
Pls let me know weather A pvt. Ltd. Companies can accept the loan from employee ( general Manager) if yes what's the procedure.

Thanks & Regards
Anshul Gupta

CA. Vinodh Kothari

CA. Vinodh Kothari (Expert)

03 December 2016 A private limited company cannot obtain loan from outsiders or from employee. It can take loan only from Banks, Directors, Directors relative.

VK

Saket Agarwal

Saket Agarwal (Expert)

04 December 2016 As per Section 72(2) read with Rule 2(1)(x) of Companies (Acceptance of Deposits) Rules 2014:
"any amount received from an employee of the company not exceeding his annual salary under a contract of employment with the company in the nature of non-interest bearing security deposit" will not be considered a deposit. Other than the above, any other loan from an employee will be treated as a deposit.

It is not that loan from an employee is prohibited. Just that it will be treated as a deposit if it does not fall within the above rule. Once it is treated as a deposit there are lot of compliance issues and because of which it is generally not economical to accept a loan which is being treated as a deposit.

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