Borrowing power under new companies act 2013

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Dear Friends,

if suppose XYZ private ltd company going to take unsecured loan of Rs.50Lacs,

whether any (at Board/EGM)  special or ordinary resolution required to be passed. any other compliances please specify relevant to new companies act 2013

 

 

Replies (6)

1) Special resolution u/s 180(1)(c) of CA 2013 if borrowing exceeds paid up capital & free reserves.  Otherwise only Board resolution.

 

2) Board resolution only at Board meeting and not by circulation - Sec.292(1)(c) of CA 1956.

 

3) Borrow only from director, his relative or member of company against declaration that the  money is not being given out of borrowed funds [Rule 2(b)(ix) of Companies (Acceptance of Deposits) Rules 1975] or from promoters as per stipulations of financial institutions [Rule 2(b)(xi) of said Rules].

 

Thanks Agrawal Sir,

 

but if fund borrowed from third party who is not relative, director or not having any substantial interest. & total Fund borrowed & going to borrow Exceeds Paid up capital & Free reserve then ? 

please answer if in case of Private ltd co only

 

 

Private company cannot accept loan from any person other than director, his relative or member.  It will be violation of Sec.58A of CA 1956 and penal provisions will get attracted.

 

 

sir

PLEASE TELL ME ABOUT, FINANCIAL ASSISTANCE FROM BANK IN TERMS OF CASH CREDIT & TERM LOAN TO LIMITED COMPANY.

 

WHAT IS THE PROCEDURE AS PER THE NEW ACT

SIR can a loan taken from director's relative be with interest? and can we convert it later into equity?

Yes it must be with Interest

 

It can be converted into equity later on.

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