Unsecured loan from relative of director

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ravinder (Querist)

17 February 2015 Dear sir,
our company has taken loans from relatives of director before the commencement of the act 2013 says Rs. 100000/-, whether the company has to file DPT-4 as per section 74 of the companies act?

Chetan Patankar

Chetan Patankar (Expert)

17 February 2015 No. However, renewal is not possible.
If you file DPT 4 ( was required to be file by the end of first quarter) then you will have to repay deposit by 31/03/15

ravinder

ravinder (Querist)

21 February 2015 thanks sir, but as per section 74 this amount covered under deposits as it is loan any circular regarding the same.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

02 August 2025 You're asking whether a **loan taken from a relative of a director before the commencement of the Companies Act, 2013** (i.e., before **01-April-2014**) requires filing of **Form DPT-4** under **Section 74**, and whether it is treated as a deposit.

Let me clarify with explanation and reference:

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### ✅ **Position under Section 74 of the Companies Act, 2013:**

Section 74 required companies to **file Form DPT-4** for any **outstanding deposits** accepted **before 01-April-2014**, which continued as deposits as per the **Companies (Acceptance of Deposits) Rules, 2014**.

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### 💡 **Key Clarification:**

Loans from **relatives of directors** were **exempt** from being treated as “deposits” under **Companies Act, 1956**, and continued to be **exempt** under **Rule 2(1)(c)(viii)** of the **Companies (Acceptance of Deposits) Rules, 2014**, *provided a declaration was taken from the lender*.

Therefore:

> 🔸 **If the company had taken a loan from a relative of a director before 01-Apr-2014**,
> 🔸 **And it complied with the old exemption (under Companies Act, 1956)** —
> 🔸 **It was not required to file DPT-4**, **because it was not treated as a “deposit”** under the new rules either.

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### 📌 MCA Clarification:

The **MCA General Circular No. 05/2015 dated 30.03.2015** also clarified the position of certain exempted deposits, including from relatives of directors, and further emphasized that:

> **Such amounts not treated as deposit under the new rules do not require filing of DPT-4.**

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### 🟡 BUT: Important Caveat

* While **fresh loans from relatives of directors** are still exempt under certain conditions,
* **Renewal of old loans after 01-Apr-2014** (even from exempt sources) might **convert it into a “deposit”**, hence subject to **Section 73** and related compliance.

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### ✅ Summary:

| Scenario | DPT-4 Required? | Reason |
| ------------------------------------------------- | --------------- | ---------------------------------------------- |
| Loan from relative of director before 01-Apr-2014 | ❌ No | Not considered deposit under new rules |
| Loan renewed/extended after 01-Apr-2014 | ✅ Yes | Treated as fresh deposit if conditions not met |
| No declaration from lender (relative) | ✅ Possibly | Might not qualify for exemption |

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If you need a **draft declaration format** from the relative or a **sample board resolution**, I can help with that too.

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