Loan from public

totally agree with above

No , because according to Section 3(iii)(d) a Private Company is prohibited to invite and accept any deposits from persons other than its members, directors and other relatives.

Agreed wiith all

As per section 3(1)(iii) a private Company is prohibited to invite or accept any deposit from the pesons other than its members, directors or their relatives.

Acceptance of deposit rules, 1975 also provides that that the deposit accepted by the private company from above persons shall be treated as exempted deposit.

Accordingly, under section 3(1)(iii) read with Acceptance of deposit Rules, 1975 a private company cannot invite or accept deposit other than its members, director or their relatives.

However, as far as loan is concern, it can accept loan from others as well.. but cannot invite from public.

In any of the condition it will not be treated as deposit.

The provisions of deposits are not applicable on Private Company

In any of the condition it will be treated as unsecured loan.

Yes, loan from relative of Director.. Firm has no legal entity.

Thanks to all,

If a P Ltd Company is taking loan from the Director/Member/Relatives of them,

is there any ceiling on the Rate of Interest to be paid to them?

Dear Experts, same is the case with my friend. The Pvt Ltd has 2 directors and they want to include 40 of their friends as members. Is it possible ? what should be the minimum share to the share holders ? Any ceiling limit on their share ? Also the company wants to pay them interest/Dividend at the rate of 20% PER MONTH every month. Is it possible ?? The scheme proposed by the directors towards each member is as follows for each member who will invest 5000/- per month

This is for one person.TDS will be deducted at prevailing retes. Is this allowable ?? Plzzzzzzzzz help :)