Private company obtain unsecured loan from partnership firm

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 March 2012 Our Company is a Private Limited Company. Please clarify us whether we can obtain unsecured loan from a Partnership firm where every partners are members of our Company.

Ajay Mishra

Ajay Mishra (Expert)
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17 March 2012 Hi

No, you can take loan from members of partnership firm who are also member of the company.

Private Company is prohibited to accept any invitation or acceptance of unsecured loans/deposits from the persons other than its members, directors or their relatives. Therefore a private company can accept deposits through private arrangement from its members, directors and their relatives.

Rule 2(b)(ix) exempt any unsecured loan money received from directors and shareholders from the definition of deposits. According to Rule 2(b)(ix), any amount received from members of a private company limited by guarantee are not exempt.

Rule 3 of Companies (Acceptance of Deposits) Rules, 1975 deal with the limit upto which a company can accept deposits/ loans. Private company exempted this limit.

For any invitation and acceptance of unsecured loan/deposits from relatives of directors and member, the company will have to file a statement in lieu of advertisement in accordance with the provisions of Rule 4A of the Companies (Acceptance of Deposits) Rules, 1975. The company will also have to file annual return of deposits in accordance with Rule 10.

Regards

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