maximum loan that a private company can take

A Body Corporate can give loan or guarantee to another exceeding 60 % of its paid up capital ( till called up) and 100% of its free reserves. Free reserves; Free reserves shall include Dividened Distribution reserve , Dividened Distribution reserve & Credit of Securities premium account as per Previous Year Audited Balance sheet and shall not include Share application money account.

No limits on borrowing or ratio between secured and unsecured loans specified in the Companies Act. However the creditors at the time of lending will definitely consider the debt equity ratio.

 

However in the case of a public company or a subsidiary of a public company, where the moneys to be borrowed together with the moneys already borrwed will exceed the aggregate of the paid up capital of the company and its free reserves, then the consent of the members in general meeting is required as per Section 293(1)(d).

Originally posted by : Jayashree S Iyer
	No limits on borrowing or ratio between secured and unsecured loans specified in the Companies Act. However the creditors at the time of lending will definitely consider the debt equity ratio.   However in the case of a public company or a subsidiary of a public company, where the moneys to be borrowed together with the moneys already borrwed will exceed the aggregate of the paid up capital of the company and its free reserves, then the consent of the members in general meeting is required as per Section 293(1)(d).

Agree with the views of Ms Jayashree. In case of Private Company there is no limit.