Deposit acceptence of private company

Nope...

Private Company can accept deposit form Directors and members of the Company.

Also 372A specifically exempt priavate companies which are not subsidary of public company.

Regards

Jaideep Pandya

Hello!

Totally agree with Jaideep.....there is no such limit prescribed in Act.......

Regards

Nidhi

No such limit under The Companies Act, but the Directors and the company may have to justify the quantum of Loan under the Taxation laws, if called upon to do so.

as above said , i also agreed that .

there is no limit prescribed under companies  act

No such limit is prescribed under the Companies Act, 1956.

Dear Friend

1.         Deposits in case of Private Limited Company

Private Company is prohibited to accept any invitation or acceptance of unsecured loans/deposits from the persons other than its members, directors or their relatives. Therefore a private company can accept deposits through private arrangement from its members, directors and their relatives.

Rule 2(b)(ix) exempt any unsecured loan money received from directors and shareholders from the definition of deposits. According to Rule 2(b)(ix), any amount received from members of a private company limited by guarantee are not exempt.

Rule 3 of Companies (Acceptance of Deposits) Rules, 1975 deal with the limit upto which a company can accept deposits/ loans.

For any invitation and acceptance of unsecured loan/deposits from relatives of directors and member, the company will have to file a statement in lieu of advertisement in accordance with the provisions of Rule 4A of the Companies (Acceptance of Deposits) Rules, 1975. The company will also have to file annual return of deposits in accordance with Rule 10.

2.         Consequences of acceptance of deposit by Private Limited Company

If a private company acceptance an amount, which may be classified as deposit under section 58A read with Companies (Acceptance of Deposits) Rules, 1975, it will cease its status of a private company and has to make all the compliances for such deposits as per the requirement of said rules, as well as to comply with all the provisions as may be applicable on public limited company such as section 58A, 58AA, 58AAA, 81, 256, 257, 198, 268, 269, Schedule XIII, 274(i)(g), 295, 297, 300, 301, 372A, etc

Private Company is prohibited to accept any invitation or acceptance of unsecured loans/deposits from the persons other than its members, directors or their relatives. Therefore a private company can accept deposits through private arrangement from its members, directors and their relatives.

Rule 2b(ix) exempt deposits accepted from directors of the Company Or Relative of Directors or a members of private Company.

In my opininion, private company can accept deposit, however it would not be treated as deposit and treated as unsecured loand and no limit would be applied.

M too agree with all that there is no such limit on the acceptance of deposit from the directors by the private co.

Can a Private Limited Company give loan to its directors

Yes. Section 295 relating to loan made by a company to directors is not applicable to private company unless it is a subsidiary of a public company.