Loans by directors under the new act

Hi all,

If a director happens to be a shareholder in the company, will loans taken from the director be treated as deposit under the new act, CA 2013 ?

What is the treatment of such loans if it is a pvt company ?

Regards,

Geetha

 

 

 

 

Replies (1)

any amount received from a person who, at the time of the receipt of the amount, was a director of the company: 
Provided that 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 

Hence, declaration from directors is mandatory to consider it exempted deposit. 
In case this declaration is not asked for, anyone can lend money through directors and every money borrowed will be exempted, which is not the intention of law.

private companies can accept loans from shareholders subject to compliance of section 73 and deposit rules, 2014.

 

 

 

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