Loans received from relatives of directors

This query is : Resolved

Ganapati Ghatti (Querist)
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04 September 2014 Dear Learned Professionals,

Please suggest me how to resolve the below case

'the company has taken huge loans from the relatives of the Directors. The company's position is not good enough to repay the loan amount. How can we clear this amount

a) Can it go for private placement of shares for clearing the loan amount.?

b) Can we show it as share application money pending for allotment.?

Please suggest if you have any other alternative solution for this.

Thank you,

Ganapati Ghatti

Rahul Malhotra

Rahul Malhotra (Expert)
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04 September 2014 Yes,
You can go with private placement of share if the company is unable to repay the loan then u should issue share to them otherwise it come under deposit under section 74 of the companies act 2013

Ganapati Ghatti

Ganapati Ghatti (Querist)
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05 September 2014 What if the company appoints the unsecured creditors as the Directors instead of going for the cumbersome issues like private placement etc.?

Please suggest your views.

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Rahul Malhotra

Rahul Malhotra (Expert)
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09 September 2014 if the company appoint director of unsecured creditor that will also treat as a deposit becuase at the time of taken moeny from them the person must be director of the company according to the defination of deposit