Loan from the relative of shareholder of a private company
This query is : Resolved
Guest
Guest
(Querist)
08 January 2011
Dear Friends / Experts,
Please see the following and advise :
A, a shareholder in a ABC private company.
B, a relative of A.
Query
Can B (relative of shareholder) directly give loan to ABC private company ?
Ans : ...............
I shall wait for your views.
Thanks.
DK.
Please see the following and advise :
A, a shareholder in a ABC private company.
B, a relative of A.
Query
Can B (relative of shareholder) directly give loan to ABC private company ?
Ans : ...............
I shall wait for your views.
Thanks.
DK.
08 January 2011
Yes, B can directly give the laon.
09 January 2011
No. It is a violation of section 3(1)(iii) (d) of The companies Act,1956.
Reason is deposit includes loan as per rule 2 of Companies (Acceptance of Deposits) Rules,1975 and loan from share holder's relative is not an exempted deposit as per the said rules meaning thereby if accepted it will violate the provisions of 58A of the said act.
Reason is deposit includes loan as per rule 2 of Companies (Acceptance of Deposits) Rules,1975 and loan from share holder's relative is not an exempted deposit as per the said rules meaning thereby if accepted it will violate the provisions of 58A of the said act.
10 January 2011
Agree with Warrier Sir. Taking loan from director or his relative or shareholder is excluded from the term "deposit". Taking loan from shareholder's relative will be considered a "deposit" and would attract the provisions of Section 58A.
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