Acceptance of loan by Pvt.Ltd.Co.

This query is : Resolved

CA Deepak P. Agrawal (Querist)
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13 February 2010 Respected Experts,
I will be glad to know the answer for my following: Can a Pvt Ltd co accept loans from a partnership firm of which all the partners are the share holders of the company.Kindly cite any case laws on the issue.
Regards...

CA Nidhi Sancheti

CA Nidhi Sancheti (Expert)
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13 February 2010 please refer section 58A, 58AA, and companies acceptance of deposit rules 1975.

CA Deepak P. Agrawal

CA Deepak P. Agrawal (Querist)
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13 February 2010 Thanks
I willl surely.
But Mam I havent received any opinion from your part. Can you please elaborate or keep the querry open for the house.
Regards

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CA Deepak P. Agrawal

CA Deepak P. Agrawal (Querist)
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13 February 2010 Rule 2(b)(ix) says that deposits does not include ampunt received by a pvt co.
So as such my querry is still open...

Rasesh

Rasesh (Expert)
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17 February 2010 A Pvt. Ltd. Co. can accept deposits only from members, directors or their relatives.

Clause ix says: any amount received by a private company from a person who, at the time of the receipt of the amount, was a director, relative of director or member.

Loans from partnership does not fall under any category of exempt deposits. In my view, it cannot be taken, since partnership does not have a seperate legal entity.

CA Deepak P. Agrawal

CA Deepak P. Agrawal (Querist)
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17 February 2010 Thanks Sir
Still I request a second opinion from someone...

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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17 February 2010 A private company can allow loans from a firm where all the partners are shareholders of the company. The provisions regarding acceptance of loans and deposits by a private company are very less stringent or in many cases not applicable to private company. So, there is no problem in your case for accepting loans from the firm. However, there may arise a problem in advancing loan to the related parties in case of a private companies or closely held public companies, as the Sections of deemed dividend my come into picture.

Hope your query is clear.

CA Deepak P. Agrawal

CA Deepak P. Agrawal (Querist)
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18 February 2010 Sirs,
As regards to deemed dividend I'am keeping a close watch.
Regarding acceptance can you please specify any provision or cirular under which it is allowed.
Regards

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CA Deepak P. Agrawal

CA Deepak P. Agrawal (Querist)
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18 February 2010 Sirs,
As regards to deemed dividend I'am keeping a close watch.
Regarding acceptance can you please specify any provision or cirular under which it is allowed.
Regards

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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18 February 2010 There is no need for a circular. The Companies Act has not restricted the acceptance of loans, secured or unsecured, from directors, their friends or relatives. The only restriction is that it cannot accept deposits or loans from a public at a large by issue of prospectus or any similar document. So, if it is not restricted, it means that it is allowed.