Loan from shareholder
Ashok Jain (Director) (49 Points)
28 December 2014
Is in company law 2014 India can pvt lttd co acceptence of loan from shareholders is allowed?
3 Replies
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 29 December 2014
No, under new Companies Act 2013 it is now allowed except in following situations:
a) If the shareholder is also a director and he gives a declaration that the loan is not being given out of borrowed funds; or
b) the loan is part of promoters' contribution as stipulated by Bank in sanction letter.
Roshan Thomas
(C.E.O )
(356 Points)
Replied 29 December 2014
Agreed. Still pvt can take loan from shareholder it will be treated as public deposit and compliances in this respect has to be done
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 29 December 2014
Yes, agreed. But conditions prescribed are very stringent and not practical to be followed by private companies.
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