Ours is a Indian private limited Joint venture company. the shareholders of the Company are ABC(indian company) holding 50 percent shares, PQR (Foreign Company) holding 49 percent shares and XYZ (foreign Company)holding 1 percent shares. The Board of Directors are 3 foreign Directors and 3 Indian Directors. These Directors represent the respective shareholding Comapny. My paid up share capital is Rs. 6 Crores. Now My query is our Indian Private COmpany wants to avail/taken Loan from PQR(shareholders) comapny. Please let me know the rules of FEMA, is general meeting required to be called. Is there any limit of availiment of Loan. Kindly guide me on the same.... 
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Replies (4)
Loan from persons resident out of india to an indian company will be hit by ECB restrictions. There is cap on the loan amounts and compliance of various formalities with AD bank and RBI.
Better you receive monies through equity or convertible debentures. Then, the procedure is simpler.
yes you have to follow ECB guidelines , before getting loan you have to take the permission from RBi
there is some restriction for use of loan
1) loan should not use for working capital purpose for the business
2) loan should not use for investment in capital market only
3) loan shpuld be used for cpaital asset for the company
other condition also ,go to RBI site read ECB guidelines
agree with mr. valji
Our Articles states certain restrictions i.e
The Shareholders shall not be obliged to provide any such further finance unless they agree as to the amount and method by which such finance is to be provided. Unless otherwise agreed, any further contribution of finance to the Company (whether by way of subscripttion for shares, stock or debentures or by way of loan or otherwise) shall be made by each of them (or members of their respective Groups) in their respective Equity Proportions, at the same time and on the same terms.
It means I need to obtain Loan from 3 shareholders in their Equity proportions...
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