Loan from Director to Pvt Ltd

It is a closely held Pvt Ltd co. Initially Capital introduction by Director is say 2 Lakh Rs. Can the director bring unsecured Loan of Rs. Say 8 Lakh from his Proprietorship firm or otherwise from his saving bank a/c. And is it necessary to pay interest on unsecured loan ?
Replies (2)
As per 179(3) and 180 of company act 2013 The director from whom money is received furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others.
In your case, director cannot give loan to company from his proprietorship business. Loan given out of saving fund is within the provisions of section 179(3) and 180.
There is no statutory compulsion on company to pay interest on loan taken from directors.

As per Section 185 , a Private or public Company cannot GIVE any loan either reprsented by its book debts or otherwise to Director of the Company or any other person in whom the director is intrested which includes a firm in which director is director or partner.

So a Company cannot give loan to any firm in which such director is director or partner. But a Company can accept the deposit from director from his own funds which he may earn either by way of business of partnership or properitership firm but such director shall file declaration that such funds was given out of its own funds and not borrowing the funds from outside.

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