Unsecured loan

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 April 2013 Dear sir,

we are having a private limited company with 2 directors. 3 years back my friend had given us rs. 20 lac as a loan without any interest or agreement by cheque.

which we have paid back to him last year by cash in different amounts by installement within 10 months.

now my CA says that being a private limited company we cannot take loan, and also cannot pay in cash.

Please let us know, how to solve this problem. We have shown in our accounts as unsecured loan.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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04 June 2013 Yes your CA is right the law further says that the loan from friend and relatives are not hit by the provisions of section 58A of the companies act but the repayment in cas is not permitted and penalty u/s 269SS can be imposed on you. So you take the cash from yor friend and issue cheque to that extant.