Ashish Kedia (Chartered Accountant) (34 Points)
05 July 2014Dear All,
Happy Afternoon !
Can anyone let me know if a company can accept loan from its directors or members?
If yes, then please give some reference or any other required details.
Thanks.
P C Agrawal
(Registered independent director Past Ch)
(8229 Points)
Replied 05 July 2014
Loan from directors: Yes, within the limits specified in Sec.180(1)(c). It will not be 'deposit' if the director gives undertaking that it is not provided out of borrowed funds. Otherwise provisions relating to public deposit will apply.
Loan from shareholder: Yes, within the limits specified in Sec.180(1)(c) read with Sec.73(2) & Rules framed thereunder which provide for conditions which are not practical and hence companies will tend to avoid.
Resolution for borrowing can be passed only in a Board meeting (and not by circulation) and MGT.14 needs to be filed.
CAclubindia
