Loans from individual.

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20 December 2013 Can a Public Limited company take Secured Loan from it's Shareholder?

Ajay Mishra

Ajay Mishra (Expert)
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20 December 2013 Yes, you can take loan.

Querist : Anonymous

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20 December 2013 Thank you Mr. Ajay, Kindly clarify if Companies (Acceptance of Deposits) Rules, 1975 have any role to play?

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Ajay Mishra

Ajay Mishra (Expert)
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20 December 2013 Yes, it will covered under Deposits for public limited company.

As per rule 3(2) a company may accept deposits from the public upto the following limits subject to fulfillment of the conditions of the Companies (Acceptance of Deposit) Rules, 1975:—
(a) upto 10% of its paid-up capital and free reserves from its shareholders (other than a shareholder in a private company). These deposits may also include any deposit from any person guaranteed by a director of the company or against unsecured debenture issued by a company;
(b) upto 25% of the paid-up capital and free reserves of the company from public.

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Querist : Anonymous

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20 December 2013 so, will it be considered as a deposit? or a loan? (compliance are associated with deposits).

Ajay Mishra

Ajay Mishra (Expert)
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20 December 2013 It will depend on management decision.

Querist : Anonymous

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20 December 2013 if a Public company is taking SECURED loan from one of it's shareholder, will it attract Companies (Acceptance of Deposits) Rules, 1975?
loan is under the limits provided in the rules, does co. needs to advertise about the same?

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Ajay Mishra

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20 December 2013 What is security against loan..........

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20 December 2013 PDCs and conditional sale of units of an under construction property.