Acceptance of deposits by public limited company

Dear Experts,

I need some clarification on applying the provision of Sec. 58A of the Companies Act, 1956.

1. Whether a public company can accept deposits/unsecured loan from the friends & relatives of Director?

2. Whether any declaration letter to be received from the lender of unsecured loan / Depositor and if so, format required?

3. If no declaration letter has been received and what will be the maturity period for repayment of deposit? As per Sec.    274(1)(g), where there is any default in repayment of maturity deposits by the Company, for a period exceeding 1 year, the Directors will get disqualified and they have to vacate their office.

  Is there any connection with Sec. 58A & Sec. 274(1)(g) of the Companies Act, 1956?

 

Need clarification for the abovesaid queries. Please clarify!!!!

Regards,

Srinath Pandurangan

 

 

 

 

 

 

 

 

Replies (1)

1. Whether a public company can accept deposits/unsecured loan from the friends & relatives of Director?

A public Company can accept deposit subject to compying the provisions of Sec 58A, and  money can be taken from director only, if its taken from freinds or relatives then as per my understanding it will fall under purview of Sec 58A. 

2. Whether any declaration letter to be received from the lender of unsecured loan / Depositor and if so, format required?

As per my understanding, there is any such requirement, for detailed procedure pl. refere Sec 58A provisions.

3. If no declaration letter has been received and what will be the maturity period for repayment of deposit?-  The period of 36 months is given for maturity subject to Renewal

As per Sec.    274(1)(g), where there is any default in repayment of maturity deposits by the Company, for a period exceeding 1 year, the Directors will get disqualified and they have to vacate their office. Is there any connection with Sec. 58A & Sec. 274(1)(g) of the Companies Act, 1956?-  

 

Read more at: /forum/acceptance-of-deposits-by-public-limited-company-248926.asp

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