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Loan to pvt ltd

krunal patel (Student) (252 Points)

06 June 2016

CAN DIRECTOR GIVE UNSECURED LOAN TO PVT LTD COMPANY IN WHICH HE IS DIRECTOR?? AND IF YES, THEN WHAT IS IT LIMIT??? PLZ RELY...

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2 Replies

Kamal Kumar (B.Com) (647 Points)
Replied 06 June 2016

Hi Krunal

A director is allowed to give loan to the Company subject to the declaration that he has not given the funds out of borrowed money

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savithri (student) (33 Points)
Replied 06 June 2016

YES...........Ministry of Corporate affairs vide its notification dated 15.09.2015 has provided that wef 15.09.2015 a private company can accept unsecured loans apart from director also from a relative of Director provided that relative of director from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others and the company shall disclose the details of money so accepted in the Board’s report. The relative need not be a shareholder of the company. -

(viii) any amount received from a person who, at the time of the receipt of the amount, was a director of the company or a relative of the director of the private company:

Provided that the director of the company or relative of the director of the private company, as the case may be, from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others and the company shall disclose the details of money so accepted in the Board’s report;”.