Unsecured loan

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kusum soni

kusum soni (Querist)
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12 October 2013 from whom a public co. and private co. can accept unsecured loan?

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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12 October 2013 There is no restriction anywhere given except it cannot take from its employees.

CA Pallav Singhania

CA Pallav Singhania (Expert)
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12 October 2013 A private limited company can take unsecured loan from its shareholders, directors and their relatives and the same would not be covered under section 58A and other deposit provisions as such transaction is exempt by deposit rules 1975.

A public company can accept unsecured loans too.

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CA Pallav Singhania

CA Pallav Singhania (Expert)
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12 October 2013 If your public company accept loan from its director then it would be considered as public deposit.

However accepting loan from a company is considered as inter corporate loan u/s 372A and not covered by deposit provisions.

If any private co. accept loan from its directors or shareholders the same would not be considered as public deposit.