unsecured loan from shareholders' relatives

This query is : Resolved

Rajeswar (Querist)
Follow

19 December 2009 A private company has taken unsecured loans from the relatives of the shareholders. Will the same be considered as deposit under section 58A read with Companies (Acceptance of Public Deposit) Rules, 1975?

kindly do clarify me.

regards

RAJA RAJESWARI S

Ankur Garg

Ankur Garg (Expert)
Follow

21 December 2009 Hello,

Yes the same would be considered as public deposit.

However unsecured loan taken from the relative of director of a private company is exempt from the definition of public deposit.

Rgards

Rajeswar

Rajeswar (Querist)
Follow

22 December 2009 Sir will the above amount to violation of Sec. 3(1)(iii) of the companies act which prohibits acceptance of deposits from public by a private company? If so, how to proceed?

Kindly clarify.

regards

RAJA RAJESWARI S

CS Pawan Kumar Baid

CS Pawan Kumar Baid (Expert)
Follow

28 December 2009 Well, following is exact text of exemption under clause (ix):
"Any amount received from a person who, at the time of the receipt of the amount, was a director of the company or any amount received from a RELATIVE OF A DIRECTOR OR ITS MEMBER by a private company."

It means relative of member of private company is exempted, provided he submits a declaration under Notification GSR 189(E) 12-Mar-04

Regards
Pawan KUmar Baid

Ankur Garg

Ankur Garg (Expert)
Follow

28 December 2009 Disagree

Dear Pawan ji you are simply misinterpreting the clause. This is not the exact clause. You miss the most inportant comma after "was a director of the company". Check yourself.

Next time be careful. There is no room for any sort of discussion. It is very much a settled rule that unsecured loans from the relatives of the shareholders is a public deposit.

Regards

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

rana andcompany

MAYUR

Tanuj Kumar Sharma

Aravind S

UPENDRAN YADAV

Subscribe Now

unsecured loan from shareholders' relatives

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA