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loan from directors and relative of directors

Madhvi Gaur (22 Points)

08 March 2018

can a company accept loan from directors and relative of directors....if yes limit of loan and time period.

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CA KANJ GOEL (OWNER) (1378 Points)
Replied 08 March 2018

no limit just a declaration from directors that they have not given loan out of borrowed funds and pass a resolution under section 189 read with section 179.

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sagar parakh (189 Points)
Replied 08 March 2018

Agreed with @ Kanj Goel

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 08 March 2018

If it is a public company, you have to comply with Sec.180(1)(c) for limit on borrowing. Further, loan from relatives of directors can be taken in case of private company [Ref.Rule 2(1)(c)(viii) of Deposit Rules].

prachi maheshwari (127 Points)
Replied 08 March 2018

take declaration from directors that they have not given loan out of borrowed funds, pass board resolutions and file MGT-14 of Board resolution as per section 179(3) and if loan amount exceeds paid up capital+free reserves+ security premium account then also pass special resolution and file MGT -14 of special resolution as per section 180 (1) (c) of companies act 2013

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CA KANJ GOEL (OWNER) (1378 Points)
Replied 10 March 2018

Prachi filing of MGT-14 has been exempted please read exemptions to private companies.

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prachi maheshwari (127 Points)
Replied 10 March 2018

yes in case of private company there is no need to pass special resolution hence filing of mgt-14 of special resolution is not applicable but we have to file MGT-14 of board resolution as per section 179(3)