All directors giving loan to company

I want to know about a situation where all directors giving loan to the company. Let's say a private company having three directors A, B, C and each one having 8L, 5L, 2L as equity. The directors A, B, C will give loan 4L, 3L, 2L respectively to company.

Please reply if there is any problem in the above approach. Thank you.

Replies (2)
Quick Summary
This discussion explores the implications of all directors providing loans to a private limited company. It clarifies that companies can accept loans from directors or their relatives, provided the funds are their own and not borrowed. Key considerations include obtaining board approval under section 179(2) and ensuring the funds are exempt from deposit provisions to avoid compliance issues.

A private limited company can accept loan from its director or relative of director from their own funds only.
Director & relative has to furnish a declaration to the company that loan is being provided from own funds & without taking loan from other.
1. Board approval under section 179
2. Ensure that such funds falls under the ambeit of EXEMPTION TO DEPOSIT DEFINITION otherwise Deposit provisions will apply

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