Relative of director

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Querist : Anonymous

Querist : Anonymous (Querist)

29 August 2012 A Pvt Co. Cant Take Loan From Individuals Except Relative of Director or Shareholders.

What is The Defination of relative of Director.

Can Co Take Loan From Relative of ShareHoldrs.

Ajay Mishra

Ajay Mishra (Expert)
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29 August 2012
Dear Friend

1. Deposits in case of Private Limited Company

Private Company is prohibited to accept any invitation or acceptance of unsecured loans/deposits from the persons other than its members, directors or their relatives. Therefore a private company can accept deposits through private arrangement from its members, directors and their relatives.

Rule 2(b)(ix) exempt any unsecured loan money received from directors and shareholders from the definition of deposits. According to Rule 2(b)(ix), any amount received from members of a private company limited by guarantee are not exempt.

Rule 3 of Companies (Acceptance of Deposits) Rules, 1975 deal with the limit upto which a company can accept deposits/ loans. Private company exempted this limit.

For any invitation and acceptance of unsecured loan/deposits from relatives of directors and member, the company will have to file a statement in lieu of advertisement in accordance with the provisions of Rule 4A of the Companies (Acceptance of Deposits) Rules, 1975. The company will also have to file annual return of deposits in accordance with Rule 10.

2. Consequences of acceptance of deposit by Private Limited Company

If a private company acceptance an amount, which may be classified as deposit under section 58A read with Companies (Acceptance of Deposits) Rules, 1975, it will cease its status of a private company and has to make all the compliances for such deposits as per the requirement of said rules, as well as to comply with all the provisions as may be applicable on public limited company such as section 58A, 58AA, 58AAA, 81, 256, 257, 198, 268, 269, Schedule XIII, 274(i)(g), 295, 297, 300, 301, 372A, etc

Yes, you can take loan from shareholders relatives.

Querist : Anonymous

Querist : Anonymous (Querist)

29 August 2012 Dear Ajayji,

My First Question Was Definition of Relative of Director, and No Where You have Written That.

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Querist : Anonymous

Querist : Anonymous (Querist)

29 August 2012 Reply........Pls....

Ajay Mishra

Ajay Mishra (Expert)
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29 August 2012 Hi

I don,t know your name....

Your second question is "Can a Co take loan from relative of shareholders".

Now you see my first reply and discover your answer.

I think, i am giving a right answer.

Regards

Querist : Anonymous

Querist : Anonymous (Querist)

29 August 2012 Dear Ajayji,

No Where I Found The Defination of Relative in Your First Answer......

Can You Mark That....

Ajay Mishra

Ajay Mishra (Expert)
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29 August 2012 Hi

I am talking about your second query and I have not answered on your first query.

Regards

Querist : Anonymous

Querist : Anonymous (Querist)

29 August 2012 That I have Already Seen,
But What is Relative Means....

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Jiten Gupta

Jiten Gupta (Expert)
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29 August 2012 Sec. 6. Meaning of "relative" — A person shall be deemed to be a relative of another if, and only if,

they are members of a Hindu Undivided Family; or

they are husband and wife; or

the one is related to the other in the manner indicated in Schedule IA.

Querist : Anonymous

Querist : Anonymous (Querist)

29 August 2012 What is Schedule IA

Querist : Anonymous

Querist : Anonymous (Querist)

29 August 2012 Schedule IA is:-

[SCHEDULE IA
[See section 6(c)]

1 Inserted by Act No. 65 of 1960.

List of Relatives

1. Father.

2. Mother (including step-mother).

3. Son (including step-son).

4. Son's wife.

5. Daughter (including step-daughter).

6. Father's father.

7. Father's mother.

8. Mother's mother.

9. Mother's father.

10. Son's son.

11. Son's Son's wife.

12. Son's daughter.

13. Son's daughter's husband.

14. Daughter's husband.

15. Daughter's son.

16. Daughter's son's wife.

17. Daughter's daughter.

18. Daughter's daughter's husband.

19. Brother (including step-brother).

20. Brother's wife.

21. Sister (including step-sister).

22. Sister's husband.