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Acceptance of loan from a firm

Mitali Agarwal (Company Secretary) (638 Points)

11 January 2012

Dear Friends,

Pls tell me the compliances reqd and appropriate sections applicable if a public ltd. unlisted co. is planning to accept loan/deposit from a partnership firm, whose partners are also the shareholders and directors of the company.

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7 Replies

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 11 January 2012

We need to contemplate if section 58A is attracted or not. I am not sure if the partners of a Firm , in this case, will be deemed to be individuals.

Wait for other members to share their thoughts.

Regards

Preet Kanwar Singh (Company Secretary) (161 Points)
Replied 11 January 2012

As per my view in this case section 58A is not applicable...as partnership firm is not seperate entity as cmpare to company so the partners are cnsidrd as individuals....

(Guest)

Section 58A (Deposits) will be attracted as acceptance of loan / amount is not covered under exempted deposites.

In case of public company amount accepted from directors is exempted deposit. Partnership Firm is not deemed to be directors. Hence you have to comply with section 58 A and acceptance of deposit rules and will have to file Statement in lieu of advertisement.

Looking forward for more healthy discussion on this query.

Regards!

Parashar (Company Secretary 2004) (1013 Points)
Replied 11 January 2012

section 58A is attracted, this not exempted under deposit rules.

Parashar (Company Secretary 2004) (1013 Points)
Replied 11 January 2012

section 58A is attracted, this not exempted under deposit rules.

CS Rajveer Rai, Gurgaon (CS) (646 Points)
Replied 11 January 2012

Loan taken from partnership firm amounts to loan from its partners who are ultimately directors of the company however after amendment of 2002 loan from directors is not exempted hence PLA is required.

(Guest)

Hi Rajveer,

Definition of deposit given under Rule 2 wherein it is provided that deposit means any deposit of money with and includes any amount borrowed by a company, but does not include follwoing:

Under Rule 2(ix): deposit shall not include following

"Any amount received from a person who, at the time of receipt of the amount, was a director of the company or a relative of a director, or member of a private company."

First of all the above exemption is applicable for both private as well as public company read:

"Any amount received from a person who, at the time of receipt of the amount, was a director of the Company or a relative of a director, or member of a private company."

Any amount received from the directors of the Private or Public company shall be categorised as exempted deposit.

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