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Loan from relative by Private Company

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Aanshi Jain

41 Points Posted on 01 July 2020

Can a private company take loan from its relatives?
if yes under what conditions?

Replies (4)

Quick Summary

A private company can indeed accept loans from its directors and their relatives. These loans are considered exempt deposits under Rule 2 of the Companies (Acceptance of Deposit) Rules, 2014. To facilitate this, a declaration from the director and/or relative providing the loan is typically required.

Priyanka Jhanwar

140 Points Posted on 01 July 2020

A private company can take loan from directors and relatives of director. Provided a declaration is given by director and relative of directors as the case may be.

Aanshi Jain

41 Points Posted on 01 July 2020

Please quote the section

Priyanka Jhanwar

140 Points Posted on 01 July 2020

Unsecured loan accepted by private company from directors/ relative of directors are covered under the EXEMPTED DEPOSITS under rule 2 of companies (Acceptance of Deposit) Rules, 2014.