My company is a Public limited company and the director is giving loan to company then what are the compnaliances and under which section of the companies Act?
18 June 2010
If the general Disclosure of interest has been recorded in Form 24AA, then no seperate disclosure is required as per Companies Act.
Loan from Director falls under the category of exempt deposits as per the Companies (Acceptance of Deposit) Rules. The requirements are that a declaration should be obtained from the director that the loan is from his own funds. Please see the rules for the specific words to be used in the declaration.
Definitions: Deposits: 2(b)"deposit" means any deposit of money with and includes any amount borrowed by, a company, but does not include-
(ix)
any amount received from a person who at the time of' the receipt of the amount was a Director of the company [or any amount received from its shareholders, by a private company, or by a private company which has become a public company under section 43A of the Act and continues to include in its Articles of Association provisions relating to the matters specified in clause (iii) of sub-section (1) of section 3 of the Act:
[Provided that the Director or shareholder, as the case may be, from whom the 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 from others;
Explanation.- For the removal of doubts, it is hereby declared that any deposit received or renewed by a company before the commencement of the Companies (Acceptance of Deposits) Amendment Rules, 1978, shall continue to be governed by the rules applicable at the time of such deposit or renewal as the case may";]
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