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Unsecure loan to company

530 views 3 replies

Niral Patel

job

89 Points Posted on 23 April 2016

Can a private limited company take unsecured loan from the HUF whose Karta is the Director of that Company ?

Replies (3)

CA VIRAL SANGHVI

Finance head

681 Points Posted on 23 April 2016

As per the Companies Act 2013, Private company can borrow only from directors apart from banks and financial institutions provided the director gives declaration that the amount that he is giving is not out of borrowed funds.

So Private limited company can not take unsecured loan as per section 73.

Pratik Shah

Practising Company Secretary

4432 Points Posted on 23 April 2016

No, Private Companies can not take loans from HUF. However, if HUF is a shareholder of such Company, then it can take loan from HUF upto 100% of Paidup capital and free reserves.

CS Arjun Rajagopal

B.com ACS

1056 Points Posted on 23 April 2016

Originally posted by : CA VIRAL SANGHVI
	As per the Companies Act 2013, Private company can borrow only from directors apart from banks and financial institutions provided the director gives declaration that the amount that he is giving is not out of borrowed funds. So Private limited company can not take unsecured loan as per section 73.