Hi,
Please clarify whether pvt. company can take interest free loan from directors?
and also whether any requirement of paying interest to loan advance by holding to wos?
Thanks
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Loan from director
Replies (5)
Request Agarwal Sir to please advise.
Yes a private limited company can obtain the unsecured loan from the directors without any interest. But if the interest is being paid, then it should not be more than the normal bank rates.
Yes, director can give interest-free loan to the company provided he gives a declaration that the loan is not being given out of borrowed funds. Company will have to comply with Sec.180(1)(c).
Thanks a lot.
Please confirm regarding interest requirement in case of loan from holding to its wholly owned subsidiary also.
Thanks
the interest should not be more than normal banking rates
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