Loan from director

Request Agarwal Sir to please advise.

Yes a private limited company can obtain the unsecured loan from the directors without any interest. But if the interest is being paid, then it should not be more than the normal bank rates.

Yes, director can give interest-free loan to the company provided he gives a declaration that the loan is not being given out of borrowed funds.  Company will have to comply with Sec.180(1)(c).

Thanks a lot.

Please confirm regarding interest requirement in case of loan from holding to its wholly owned subsidiary also.

Thanks

the interest should not be more than normal banking rates