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Loan from director

Jishnu Surendran (Finance Manager) (312 Points)

24 August 2013

Guys,

The MD of a private limited company is also the MD of another private limited company and also a sole proprietor. Can I show the cash receipts from these companies as Loan from MD ? As a matter of fact it should be treated like that as per company law to avoid section 58 A but my doubt is whether I can show the names of the companies in my tally receipt, my account is with MD though ?

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3 Replies

Ajay Mishra (Company Secretary) (74332 Points)
Replied 25 August 2013

A company can take loan from its director, there is no restriction under section 58A.

Ajay Mishra (Company Secretary) (74332 Points)
Replied 25 August 2013

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.

For every company you should use the world loan from director in place of MD, because MD is also a director.

lalam.hari babu (Qualified cost accountant) (77 Points)
Replied 26 August 2013

Whether any prior permission from ROC for accepting deposits from Members of pvt ltd?what is the last date for filing roc returns with respect to Accepting Deposits?