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Can Private company take loan from HUF and relative of directors

Akshay Taparia (1 Points)

22 June 2018

Can Private company take loan from HUF and relative of directors?

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2 Replies

Jatin Bajaj (CS) (2930 Points)
Replied 22 June 2018

Yes, as per the Deposits rules, read with amendment dated 15th September 2015, read with section 2 (77) of the Companies Act 2013, a Company can accept the deposits from the directors of the Company and relatives of the director which inncludes HUF as per section 2 (77) of companies act 2013. Provided that such Director or HUF shall file the declaration that they have given the money out of their own funds and not from borrowings from any bank or public financial institutions.

Further the amount of loan shall be disclosed in Balance sheet and reference shall be given in the Board report

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Bunty (student) (53 Points)
Replied 08 November 2018

Sec. 2(77) talks about members of HUF as relatives; not the HUF as a separate entity as relative. I think accepting loan from HUF is not out of the purview of deposits.