11 July 2009
ACCORDING TO ME A PUBLIC LIMITED COMPANY CAN TAKE LOAN FROM SHAREHOLDER & BODY CORPORATE. IS IT CORRECT? WHETHER IT CAN TAKE LOAN FROM BANKS/PFI/INDIVIDUALS. ETC PLZ REPLY AS SON AS POSSIBLE . ITS URGENT
Kindly appreciate, Yes you are right and a public limited company can take loan from other company and body corporate and the same would be covered under section 372A as an inter corporate loan.
A public company can also take loan from Banks/PFIs under the same section 372A as an inter corporate loan.
But if such company take loan from an individual the same would be considered as public deposit under section 58A read with Companies (Acceptance of Public Deposit) Rules, 1975.
As per the definition of deposit given in Rule 2 of the said rules “deposit means any deposit of money with and include any amount borrowed by, a Company but does not include certain amounts.
There are certain amounts which are not considered as deposit as per the rules above and such amount includes inter corporate transaction hence amount taken by company/bank and PFI are not considered as deposit.
On the other hand amount taken by public company from individual is not covered in the exemption given by the said rule, hence amount taken by public company from individual is considered as deposit under section 58A read with Companies (Acceptance of Public Deposit) Rules, 1975.
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