Unsecured loans by pvt.co.

This query is : Resolved

Rajee (Querist)
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30 October 2010 Dear members
Can a private limited co. get unsecured loan from the relatives of the members and from outsiders?
The pvt. has already got unsecured loan from its directors. Is the comapny required to record the above details in the Register of contracts?
Should the auditor of the above co. disclose the loans given to directors in the audit report?

Kinldy clarify.

thanks & regards

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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30 October 2010 Section 3(1)(iii)(d) of the companies Act,1956 prohibits acceptance of loan from outsiders.

Sections 297 and 299 of the said act do not apply to loan from directors and hence no need to record the same in the register of contracts maintained by the company.

In view of the above ,the statutory auditor need not mention the loan given to directors in the 227(4A), CARO ,report.

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