LOAN FROM SHAREHOLDERS IN CASE OF PRIVATE COMPANY
This query is : Resolved
Guest
Guest
(Querist)
14 July 2009
A private company can accept loan only from director, its relatives and shareholders.
My query is: if a private company has taken a loan from Mr. A (who is shareholder of company) in 2005 of Rs. 10.00 Lacs.
But now Mr. A has transferred all its shares in 2009 to some other member.
Can the loan accepted by the company from Mr. A while he was shareholder of the company be continued by the company in 2009 when he has ceased as shareholder of the company. Else the company is required to repay the loan to MR. A now because as on date he is not member of the company.
A private company can accept loan only from director, its relatives and shareholders.
My query is: if a private company has taken a loan from Mr. A (who is shareholder of company) in 2005 of Rs. 10.00 Lacs.
But now Mr. A has transferred all its shares in 2009 to some other member.
Can the loan accepted by the company from Mr. A while he was shareholder of the company be continued by the company in 2009 when he has ceased as shareholder of the company. Else the company is required to repay the loan to MR. A now because as on date he is not member of the company.
14 July 2009
Yes.
The Loan is to be repaid.
The Loan is to be repaid.
14 July 2009
Hi Neha,
Kindly appreciate, Yes you are right a private limited company can take loan from director, its relatives and shareholders.
But if such company take loan from an individual other then its director, relatives and shareholders 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.
In view of the above and in my opinion the amount of Rs. 10.00 Lacs shall be treated as public deposit unless and untill it is repaid by the company because lender is not a member of the company now.
Further there is no DCA Clarification against the opinion above.
Best Regards
Kindly appreciate, Yes you are right a private limited company can take loan from director, its relatives and shareholders.
But if such company take loan from an individual other then its director, relatives and shareholders 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.
In view of the above and in my opinion the amount of Rs. 10.00 Lacs shall be treated as public deposit unless and untill it is repaid by the company because lender is not a member of the company now.
Further there is no DCA Clarification against the opinion above.
Best Regards
Guest
Guest
(Querist)
14 July 2009
Experts are requested to please substantiate the reply to the query with DCA Clarification, if any or any case law.
Guest
Guest
(Querist)
14 July 2009
Regards
Neha
Neha
15 July 2009
As mentioned in my earlier reply there is no DCA Clarification on this issue. I didn't find anything.
Well wait for other Experts reply.
Regards
Well wait for other Experts reply.
Regards
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