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