Sec 25 Company

Type of section 25 company

A section 25 company, which is proposed to be registered with limited liability, may either be a public limited company or a private limited company as may be decided by the promoters.

A careful reading of section 25 of the Act brings into picture the corporate status of an association established for welfare purposes without incorporation of the words 'Private Limited' or 'Limited'.

So if company adopts public company format than unsecured loan from shareholder must be treated as public deposit and you have to comply with section 58A read with Deposit rules, 1975.

If company adopts private company format than unsecured loan from shareholder is very much allowed as the same is exempted from the definition of deposit by Deposit rules, 1975.

Regards

Can a section 25 Company accept unsecured loans from the books of the associate companies / firms  of the Shareholders of that Section 25 Company.

Please advise

An early action will be appriciated

Company u/s 25 Registered in August month,before registration it was worked as Association and Association having Bank A/c.What is legal procedure  for converting  Bank Balance of Association to Company?

Plz guide