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Hi,
Q1.can Individual give the unsecured loan to Pvt Ltd company?
Q2 Can share holder give the loan to Pvt Ltd company
Is there any compliance in ROC & Income Tax reporting ?
please advise.
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Individual loan in Pvt Ltd
Replies (1)
| Yes, both are allowed, with conditions: 1. Loan from an individual (non-shareholder, e.g. director, relative of director, or any other person): Permitted under Section 73(2) of Companies Act read with Companies (Acceptance of Deposits) Rules, 2014, as an exempted deposit, provided it's not treated as a 'deposit' under the Act, typically loans from directors (out of their own funds, with a declaration that funds aren't borrowed) are exempt. 2. Loan from a shareholder: Generally also exempt from 'deposit' rules if from a body corporate / if specific conditions under Rule 2(1)(c) are met, but loans from shareholders who are individuals need careful check, as plain shareholder loans (not relatives of directors) may NOT automatically qualify for exemption and could be treated as deposits if conditions aren't met. 3. ROC compliance: File Form DPT-3 annually (return of deposits/exempted deposits) by 30th June for the previous FY, disclosing all such loans even if exempted. 4. Income Tax: Section 269SS applies, loan/deposit above Rs. 20,000 must be received via account payee cheque/bank transfer/ECS, not cash, else penalty under Section 271D. Interest paid (if any) is subject to TDS under Section 194A if exceeding threshold. 5. Get a proper loan agreement/declaration in place specifying it is not from borrowed funds, and disclose appropriately in financial statements. |
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