Acceptance of loan from public

Go through the attached file. It might help you.

https://www.vakilno1.com/bareacts/companiesact/s58a.htm

Regards,

Devendra. K

As per the Definition of Private Company as specified in Section 3(1) (iii) of the Companies Act, 1956

A private Limited Company can accept loans/ Deposits only from its members, Directors or their relatives only.

This section specifically restricts the acceptance of loans & Deposits from Public.

Regards Neha

ya fully agree with neha

yes i think neha is right, because as per purview of Section 3(1) (iii) read with u/s 58A implies that, private Limited Company can accept loans/ Deposits only from its members, Directors or their relatives only, but they can accept d same if loans/ Deposits received in joint name of non-members and members jointly,

keep sharing,

Hi,

INTER CORPORATE LOANS

Kindly appreciate, A public and private limited company can take loan from other company and body corporate and the same would be covered under section 372A as an inter corporate loan. The above is exempt from the deposit rules, 1975.

A public and private company can also take loan from Banks/PFIs under the same section 372A as an inter corporate loan.

But if such company take loan from an individual the same would be considered as public deposit under section 58A read with Companies (Acceptance of Public Deposit) Rules, 1975.

As per the definition of deposit given in Rule 2 of the said rules “deposit means any deposit of money with and include any amount borrowed by, a Company but does not include certain amounts.

There are certain amounts which are not considered as deposit as per the rules above and such amount includes inter corporate transaction hence amount taken by company/bank and PFI from other corporate are not considered as deposit.

On the other hand amount taken by public company from individual is not covered in the exemption given by the said rule, hence amount taken by public company from individual is considered as deposit under section 58A read with Companies (Acceptance of Public Deposit) Rules, 1975.

LOAN FROM INDIVIDUALS/OUTSIDERS

Kindly appreciate, A private limited company can take unsecured loan from its shareholders, directors and their relatives and the same would not be covered under section 58A and other deposit provisions as such transaction is exempt by deposit rules 1975.

But if a private company takes unsecured loans from persons other than its shareholders, directors and their relatives the same would be considered as deposit under section 58A read with Companies (Acceptance of Public Deposit) Rules, 1975 and would be considered as a serious violation of section 3(1)(iii).

In case of this default consequence under section 43 shall apply.

Hope this detailed info would be of some help.

Best Regards

Originally posted by : Ankur Garg
	LOAN FROM INDIVIDUALS/OUTSIDERS Kindly appreciate, A private limited company can take unsecured loan from its shareholders, directors and their relatives and the same would not be covered under section 58A and other deposit provisions as such transaction is exempt by deposit rules 1975.   But if a private company takes unsecured loans from persons other than its shareholders, directors and their relatives the same would be considered as deposit under section 58A read with Companies (Acceptance of Public Deposit) Rules, 1975 and would be considered as a serious violation of section 3(1)(iii).   In case of this default consequence under section 43 shall apply.   Hope this detailed info would be of some help.   Best Regards

Yes, i fully agree with the views of Ankur Ji. Therefore, a private company cannot take loan from public in general.

(As per section 3(1)(iii) read with Rule 2 of Acceptance of Deposit Rules, 1975)

Thank you Ankur ji.

My concept is quite clear now regarding this matter.

Originally posted by : Ankur Garg
	INTER CORPORATE LOANS   Kindly appreciate, A public and private limited company can take loan from other company and body corporate and the same would be covered under section 372A as an inter corporate loan. The above is exempt from the deposit rules, 1975.   A public and private company can also take loan from Banks/PFIs under the same section 372A as an inter corporate loan.   But if such company take loan from an individual the same would be considered as public deposit under section 58A read with Companies (Acceptance of Public Deposit) Rules, 1975.   As per the definition of deposit given in Rule 2 of the said rules “deposit means any deposit of money with and include any amount borrowed by, a Company but does not include certain amounts.   There are certain amounts which are not considered as deposit as per the rules above and such amount includes inter corporate transaction hence amount taken by company/bank and PFI from other corporate are not considered as deposit.   On the other hand amount taken by public company from individual is not covered in the exemption given by the said rule, hence amount taken by public company from individual is considered as deposit under section 58A read with Companies (Acceptance of Public Deposit) Rules, 1975.   LOAN FROM INDIVIDUALS/OUTSIDERS Kindly appreciate, A private limited company can take unsecured loan from its shareholders, directors and their relatives and the same would not be covered under section 58A and other deposit provisions as such transaction is exempt by deposit rules 1975.   But if a private company takes unsecured loans from persons other than its shareholders, directors and their relatives the same would be considered as deposit under section 58A read with Companies (Acceptance of Public Deposit) Rules, 1975 and would be considered as a serious violation of section 3(1)(iii).   In case of this default consequence under section 43 shall apply.   Hope this detailed info would be of some help.   Best Regards

hi ,

can a society accept money/loan from public? will it be treated as deposit?