Loan to directors of private company

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Dillip Kumar sahoo (Querist)
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11 March 2018 Can a director of private company take loan from same private company without showing details to ROC.
And
Can a director of private company provide loan to same company without any restriction

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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12 March 2018 1. Director can take a loan from the same private company subject to following condition
1. In its capital no other body corporate has invested any money, i.e., its shareholder does
not include any body corporate;
(b) If the borrowings of the lending company from banks or financial institutions or anybody corporate is less than twice its paid up capital or Rs. 50 crores, whichever is lower; and
(c) Such a company is not in default in repayment of such borrowings subsisting at the time of making transactions under this section

Further Loan can be given by the company if
1. Loan given to a managing director/whole-time director, as a part of the conditions of service extended by the Company to all its employees.
2. Loan given to a managing director/whole-time director in pursuant to any scheme approved by the members by a special resolution.
3. Company which in the ordinary course of its business provides loans or gives guarantees or securities and the Company charges interest at a rate not less than the bank rate declared by RBI.

a private company can accept unsecured loans from director provided that director from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others and the company shall disclose the details of money so accepted in the Board’s report