Loan from public by public ltd co.

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 December 2011 All,

What are the ways in which a Unlisted Public Ltd Co. can borrow money ? Whether it can borrow from general public without giving them any voting rights/ share.Can it borrow money from general public in form of unsecured loans.

Your prompt reply would be appreciated.

Regards
Deepak Agarwal

Guest

Guest (Expert)

22 December 2011 Public company can borrow from directors, it is an exempted deposit.

Public company can also borrow from other companies whether public or private, it is also exempted deposit.

If case public company borrow from general public, deposit rules under section 58A of Companies Act, 1956 will be applicable and Statement in lieu of advertisement (SLA) will be filed with ROC.

Charu Srivastava

Charu Srivastava (Expert)

22 December 2011 The Company can borrow money by following methods:-
1). Loan from Banks and financial institutions
2). Issue of Debentures
3). Issue of Bonds
4). Public Deposits

Yes company can borrow from public known as public deposits under section 58A of the Companies Act,1956.Public deposits are unsecured loans.