Companies act 2013

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TARIQUE RIZVI (Querist)
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17 June 2014 As per Companies Act, 2013:- There is a restriction on accepting the unsecured loans from relatives of directors and members.

As per Companies Act, 2013, director can give loan to the company with this declaration that loan given is out of the own capital and are not borrowed funds.

It means that, if you require loan from 100 relatives, would it mean that 100 relatives of the directors should be appointed as directors. How this is possible? Number of directors will increase immediately. Resolution will have to be passed.

Ankur Garg

Ankur Garg (Expert)
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17 June 2014 Intention of Law is to restrict relative. Appointing 100 relatives as Director to allow loan from them is not the intention of law.

However loan from director will not be treated as deposit under companies act 2013.

Thanks