SECURED or UNSECURED LOAN from an INDIVIDUAL

This query is : Resolved

Saurabh Jindal (Querist)
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11 July 2009 Hi Experts!

Plz tell me whether a public limited company can take a SECURED or UNSECURED LOAN from an INDIVIDUAL( e.g.- Mr. X)

Plz tell me the Appropriate Section as per Companies Act

ITS URGENT.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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11 July 2009 already answered.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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11 July 2009 ohhh its for company ACt.

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vinod kumar lalwani

vinod kumar lalwani (Expert)
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11 July 2009 hello!

there is no bar in companies act as far as status of borrower is concern (ref. section 293)and borrower may be an individual.

why u think it is not allowed as per law?
it is permissible.

Ankur Garg

Ankur Garg (Expert)
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11 July 2009

If a public limited company take a SECURED or UNSECURED LOAN from an INDIVIDUAL the same shall be treated as Deposit under section 58A read with Companies (Acceptance of Public Deposit) Rules, 1975.

Reason being the same transaction is not covered in the list of exampted deposit inder rule 2 of Companies (Acceptance of Public Deposit) Rules, 1975.

Regards