Loan to company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 April 2016 Dear Experts,:
Kindly clarify.....1) can A pvt. Ltd.
company accept the loan from its
Director if yes what should be minimum
Interest rate....2) can A Pvt. Ltd. Company accept the interest free loan from its director or not,

Regard
Naman Rajpal

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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10 April 2016 Yes company can borrow loan from its director, as per provisions sec 73 clause (viii) of rule 2c companies act excludes loan from director from purview of deposit definition if directors give decoration that the amount he is lending is not out of borrowed funds.

Querist : Anonymous

Querist : Anonymous (Querist)

10 April 2016 Sir you means to say company can accept the loan from its director however director have to declare that the fund was not borrowing
right......
but my query was..1) on receipt of loan what should be the minimum interest rate....2) can A pvt. Company accept interest free loan from its director or not,

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KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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10 April 2016 Yes,Company can take interest free loan from director as per provisions sec 186(7) of companies Act 2013.
Minimum interest to paid on amount borrowed. From directors no provision related to payment of interest. It is optional for payment of interest by company to its director.