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Unsecured loan by

CS Pooja (Company Secretary) (305 Points)

14 September 2011

Dear all, Please confirm whether PVT CO can accept unsecured loan with interest from Sister Concerns( Partnership Firm and unregistered AOP)who are not members. Regards, Pooja

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AMIT MISHRA (Legal Professional) (393 Points)
Replied 14 September 2011

Hi Pooja,

In your case the unsecured loan taken cannot be termed as a loan from a sister concern. A private Company is no doubt not covered under Section 372A and can accept loan from director or its members (even a company pvt. ltd) but here the association of persons and partnerships are outsiders and the money advanced would come under the purview of deposits which would be violation of section 3(1)(iii)

Thanks & Regards

Amit Mishra

BSamrish & Co.

New Delhi