Depoit meaning

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 March 2010 Hi all,

Please clarify whether loan taken from the person who is director as well as member of Public Company can be termed as Depoit???

Ankur Garg

Ankur Garg (Expert)
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25 March 2010 Loan taken by a public company from its director is not treated as public deposit.

If a public company accept loan from its members it would be considered as deposit.

But according to me situation got changed when such director is also a member of the company and the above exemption get lost.

So if a public company accept loan from its director who is also a shareholder it would be considered as public deposit and deposit rules 1975 needs to be complied with.

Views of other members solicited.

Regards

Rasesh

Rasesh (Expert)
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25 March 2010 I hold a different view. If the loan is taken from a person who is a director at the time when the deposit was taken, then it would not be considered as a deposit, irrespective of the fact that he is also a member.

If I were to think rationally as to why should the law exempt deposits from directors; Might be because they are the people at the helm of the affiars. So if they are also shareholders, even better commitment gets displayed by the director. Whereas deposit from a members who are not directors is as good as deposit from ordinary members of the public and hence should be considered as deposits.

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Querist : Anonymous

Querist : Anonymous (Querist)

26 March 2010 Thank you . But can you support your opinion with relavant source or case law if any.

Guest

Guest (Expert)

28 April 2010 Refer the acceptance od deposit rules. It clearly mention that Loan from director is not deposit