Unsecured loan from relative of director
This query is : Resolved
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?
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?
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
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
21 February 2015
thanks sir, but as per section 74 this amount covered under deposits as it is loan any circular regarding the same.
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:
---
### ✅ **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**.
---
### 💡 **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.
---
### 📌 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.**
---
### 🟡 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.
---
### ✅ 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 |
---
If you need a **draft declaration format** from the relative or a **sample board resolution**, I can help with that too.
Let me clarify with explanation and reference:
---
### ✅ **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**.
---
### 💡 **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.
---
### 📌 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.**
---
### 🟡 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.
---
### ✅ 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 |
---
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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