Rajesh Tarpara (Company Secretary in Practice) (113 Points)
03 February 2010
my question:
1. is there any contraventon of section 58A and / or 372A, if a public company accept unsecured loan from its shareholders only.
2. there are two public co. A Ltd. and B Ltd. ( both closely held)
Mr. X and Mr. Y is common directors in both Co. with 10 % share holing each.
further Mr. X is CMD in A ltd. and Chairman in B ltd.
now if B Ltd. gives unsecured loan to A Ltd. whether section 295 is attracted to this transation or not please guide me
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 04 February 2010
1. If a public company accept unsecured loan from its shareholders without complying the provisions of section 58A and Deposit rules, 1975 then there is contraventon of section 58A. Section 372A has no role to play.
2. Section 295 is applicable in this case.
Regards
Aman Jain
(Company Secretary in Practice)
(165 Points)
Replied 04 February 2010
Dear Rajesh,
1) Yes, its a contravention of 58A if shareholder is an individual.(not if corporate).
2) depend on conditions referred in 295(1) (a) to (d)
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 04 February 2010
Dear Rajesh,
1. Public company can accept deposit from its shareholders, subject to the provisions of section 58A and Acceptance of Deposit Rules, 1975. and subject to the limit of 10 % of its paid up capital and reserves.
2.Yes section 295 will be applicable.
However, secdtion 295 would not apply in the following case:-
1. if the lending company is a Private Company
2.Loan is given by holding company to its subsidiary
3.guarantee is given in relation to loan to its subsidiary.
J. Manivannan
(Advocate & IP)
(242 Points)
Replied 04 February 2010
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 06 February 2010
Dear Vannan Ji,
As per Rule 2(b)(ix) of Acceptance of Deposit Rules, 1975
"any amount received from a person who, at the time of the receipt of hte amount ,was a Director of a Company or any amount received from a relative of a director or its member by a Private Company.
Thus in case of Public Company deposit from Directors are exempted Deposit.
In case of Private Company, can only accept deposit form its Directors, Shareholders and their relatives as per section 3(1)(iii) and as per the above rule deposit from all of them is a exempted deposit. Thus, provision of deposit would not apply and in each case it would be unsecured loan.
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