Loan from shareholders

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 February 2012 Can a director or shareholder grant a loan to private limited company and if yes then whether secured or unsecured and upto what extent? Thanx in advance.

Jatin Agrawal

Jatin Agrawal (Expert)
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04 February 2012 co. can very well accept unsecured loans from directors/shareholders

in my opinion co. cannot take a secured loan from shareholders/directors....coz it may prejudice the rights of unsecured creditors......allowing secured loans may affect the rights of third parties...so on this logic i believe it is not allowed..
still i lam leaving the question open for further comments from other experts

and please don't create a new thread...search first

https://www.caclubindia.com/forum/unsecured-loan-from-director-of-private-company-34234.asp

CS Ankur Srivastava

CS Ankur Srivastava (Expert)
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09 February 2012 A private limited company can very well accept deposits. However, deposits accepted from directors or shareholders of a private company is a exempted deposit. So limits would also not apply on that and it will be classified as exempted deposit.

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CS Ankur Srivastava

CS Ankur Srivastava (Expert)
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09 February 2012 The cost of deposit is much lower than any other mode.