58A

This query is : Resolved

student (Querist)
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07 May 2011 CO A (PVT LTD) ACCEPTED DEPOSITES FROM ANOTHER CO [B] WITHOUT ANY ADVTS ETC [NOT AS PER SEC 58A(1) & (2)].....CO B HAD ALSO TAKEN LOAN FROM OTHER BANKS /FIS FROM WHICH IT IS PAYING CO A .........

THEREFORE AS PER ACCEPTANCE OF DEPOSIT RULES DEPOSIT NOT INCLUDE

INTER CORPORATE DEPOSITS [OMMTTED ]

ACCEPTANCE OF DEPOSIT FROM DIRECTOR OR RELATIVES OF DIRECTOR OR MEMBER PROVIDED DELARATION IN WRITING THT AMT GIVEN AS DEPOSIT IS NOT OUT OF THE LOAN BORROWED.

BUT IN MY CASE THIS COND IS VIOLATED ..

HOW CAN I FLOAT CO BY TAKING UNSECURED LOANS FROM DOR OR MEMBRS.

WHETHER THERE WIL BE VIOLATION IF SUCH AMT IS GIVEN O/T OF SECURED LOANS.

WHT 'S THE SOLUTION

Jayashree S Iyer

Jayashree S Iyer (Expert)
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09 May 2011 You can take unsecured loans from directors or their relatives or members however subject to getting a declaration from them that they have lent the money out of borrowed funds.

So if the amount is lent out of secured loans, there is violation of Companies (Acceptance of Deposits) Rules. The unsecured loan would in that case, amount to Deposit attracting provisions of Section 58A.

Yours being a private company is prohibited from any invitation or acceptance of deposits from persons other than its members, directors or their relatives.