Loan from firm whose partners are relative of private ltd co

Hi Umesh,

Certainly yes the following is to be treated as a deposit. A PVT LTD COMPANY CAN ACCEPT LOAN ONLY FROM ITS MEMBERS OR DIRECTORS AND IS A VIOLATION OF SECTION 3 (1)(iii) of Companies Act 1956.

Thanks & Regards

Amit Mishra

BSamrish & Co

New Delhi

Thanks for the reply but I am stil confused regarding relative of Director.Whether Partnership Firm is excluded from the definition of relative irrespective of  either one or all the partners are relative of Director of the Pvt Ltd Co.I think it is important to know whether a Partnership Firm can be a relative to any person.

Please comment.

Partnership firm is a seperate entity than partners even under Income Tax Act. Partnership firm has to obtain seperate PAN. Proprietory firm and proprietor are one and the same. Hence in my opinion, even if both the partners are relatives of directors, Sec-58A will be applicable in your case.