Section 58A Public Deposits
This query is : Resolved
28 December 2010
QUERY 1:
X, Y and Z are the share holders and directors of XYZ Pvt Ltd
XYZ Pvt Ltd is a holding company of A Pvt ltd, B Pvt ltd, C Pvt ltd and D Pvt Ltd
If X, Y and Z gives loan to A Pvt ltd, B Pvt ltd, C Pvt ltd and D Pvt Ltd, will it attract the provisions of 58A or not?
Note: X, Y and Z are not the directors and shareholders A Pvt ltd, B Pvt ltd, C Pvt ltd and D Pvt Ltd
QUERY 2:
P, Q and R are the share holders and directors of 10 private companies and partners of a LLP.
Can a LLP give loan to the 10 private companies in which P, Q and R are the shareholders and directors?
On both the above cases, i need to know if there is any Sec 58A violation or any violation under the companies act.
X, Y and Z are the share holders and directors of XYZ Pvt Ltd
XYZ Pvt Ltd is a holding company of A Pvt ltd, B Pvt ltd, C Pvt ltd and D Pvt Ltd
If X, Y and Z gives loan to A Pvt ltd, B Pvt ltd, C Pvt ltd and D Pvt Ltd, will it attract the provisions of 58A or not?
Note: X, Y and Z are not the directors and shareholders A Pvt ltd, B Pvt ltd, C Pvt ltd and D Pvt Ltd
QUERY 2:
P, Q and R are the share holders and directors of 10 private companies and partners of a LLP.
Can a LLP give loan to the 10 private companies in which P, Q and R are the shareholders and directors?
On both the above cases, i need to know if there is any Sec 58A violation or any violation under the companies act.
Jayashree S Iyer
(Expert)
28 December 2010
Answer to Query 1
Yes it will attract Section 58A. Loans from members or directors alone is not considered a "Deposit" as per Companies Acceptance of Deposit Rules, 1975.
Answer to Query 2
Loan by LLP to 10 private companies will be a "Deposit".
Yes it will attract Section 58A. Loans from members or directors alone is not considered a "Deposit" as per Companies Acceptance of Deposit Rules, 1975.
Answer to Query 2
Loan by LLP to 10 private companies will be a "Deposit".
28 December 2010
Dear Jayashree,
Thanks a lot for the assistance..
But what is the Limit for an LLP and how many Pvt Company it can invest which will not be considered as Deposit??
Thanks a lot for the assistance..
But what is the Limit for an LLP and how many Pvt Company it can invest which will not be considered as Deposit??
Jayashree S Iyer
(Expert)
28 December 2010
Dear Mohammad,
Loan by LLP to a private company will be considered a deposit.
Loan by LLP to a private company will be considered a deposit.
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