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Unsecured loans

KBN RAO (8 Points)

26 December 2020

How much of unsecured loans in a balance sheet is to be considered under capital/equity while arriving at D/E Ratio of Partnership Firms and Corporates?

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4 Replies

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 28 December 2020

Loans from	Conditions, if any:
1.)	Shareholder:	Member: Yes, can accept, but subject to the condition specified in deposit Rules
2.)	Director/Relatives of Director	Yes, can accept, but the director/relative will give a Declaration in writing that money is not given out of borrowed funds and company will disclose it in the Board’s report.
3.)	Employee	Yes, can accept up to the employee’s annual salary ( there should be a contract of employment with the company) in the nature of non- interest bearing security deposit.
4.)	Any other Individual	Can’t accept because it is prohibited by the definition of Private Company.
5.)	Proprietorship Firm ;	Can’t accept because it can’t be director, Member or relative of Director.
6.)	HUF	Can’t accept because it can’t be director, Member or relative of Director.
7.)	Partnership Firm	Can’t accept because it can’t be director, Member or relative of Director.
8.)	Any Company	Yes, can accept, but also comply with Sec 179(3) wherein the conditions are specified for the lender
9.)	Banks	Yes, can accept
10.)	Trust	Yes, can accept, but loan received should be non- interest bearing.
11.)	Outside India	Yes, can accept, but subject to the provisions of the Foreign Exchange Management Act, 1999 and rules and regulations made there under.
12.)	Govt. organization ( eg. SIDBI)	Yes, can accept
13.)	Any other Financial Institution which are not incorporated as Banks (eg. Religare, Fullerton, Barclays, Bajaj Finance). Yes, can accept