Become a Certified GST Practitioner. Batch begins 18th Nov. Register Now!

Loan in Private Limited Company

Tony K (Shareholder) (51 Points)

03 November 2019

I am shareholder and director in a Private Limited Company that I inherited recently. In reviewing the balance sheets it has loans from 2 individuals. They used to be shareholders in the company few months ago ago. The loans will continue as company has no funds. The question I have is that

1- Is there any issue if these loans continue on books of the company ?

2- Can a distant relative provide loan to Private Limited company?

3- Can this become an issue at any time or I should not be concerned about it?

Thank you for any guidance on this forum.

Reply
Follow
Share

3 Replies

achuth menon (274 Points)
Replied 04 November 2019

Loan very much comes under the definition of Deposit under 2(31) of Companies act 2013 DPT-3 form needs to be filed every year on or before the 30th june from the closure of financial year if an individual is both director and shareholder the loan advanced will come under the exempted deposit under Rule 2(1)(c)(viii) of Companies (Acceptance of deposit rules 2014 if it is exempted it is mandatory to file DPT-3 One time return and DPT-3 return as well

Upgrade to CAclubindia Pro. Subscribe Now!

Tony K (Shareholder) (51 Points)
Replied 16 November 2019

Dear Mr. Menon - Thank you for your response.

The loans were taken when the people who gave the loan were shareholders in the company. They are no longer shareholder but the loan continues. Is it still necessary to file DPT-3 ?

Also, what is the difference between deposit and loan ?

Appreciate any clarifications.

Regards