Since we all know Section 180 is exempted for private companies???
In such circumstance, if a Private Co. wants to borrow money, can it borrow any amount of money just by passing a simple board resolution under section 179. If not, What is the limit and compliances for borrowing by a private company?
Further, what circumstances (and which section) will bar or restrict a private company from borrowing beyond a certain limit, if there is any limit??
5 Replies
Divakar
(Student CA Final )
(11857 Points)
Replied 28 February 2018
But who gonna make finance to a pvt company without any limit... Just think about that... And no restrictions for pvt company
CA Carol Pereira
(28 Points)
Replied 28 February 2018
Private limited companies can borrow from directors and other companies and financials institutions. However the directors have to give a declaration that the money is not borrowed by him. Also a special resolution needs to be passed for taking loans from directors, financials institutions and other companies if the aggregate amount of loan exceeds the total paid up capital and free reserves of the company.
Kindly go through section 73 and Section 180(1)(c) for the above clarification.
Divakar
(Student CA Final )
(11857 Points)
Replied 28 February 2018
Pvt company is of board of directors... In that case from whom he wants to required permission as in case of public company from shareholders
CA Carol Pereira
(28 Points)
Replied 28 February 2018
A special resolution needs to be passed and incase of Pvt Ltd company the board of directors and shareholders is the same. So its like the directors have to pass a special resolution which is a secreterial requriement.
Richa Shaw
(45 Points)
Replied 01 March 2018
Dear Mr. Carol,
Why do we need to refer section 180(c) for pvt co. It is completely exempted for pvt co. since 5.6.15.
Do pvt. co need to take shareholders approval.?
Why do we need to refer section 180(c) for pvt co. It is completely exempted for pvt co. since 5.6.15.
Do pvt. co need to take shareholders approval.?
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