| Sep-30-2021

Unsecured Loans

  • You must be logged in to reply to this topic.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Replies
  • CA VenkataramaniVandana Rathi
    Participant

    Under Indian laws, can a private limited company take unsecured loan from an individual? If yes, kindly refer the section/law.

    CA Venkataramanitally
    Keymaster

    A private limited company cannot accept secured/unsecured loan from any individual.

     

    Chapter V (sections 73 to 76A) of Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014 deals with Acceptance of Deposits by Private Limited Companies. In brief, the following table provides a brief overview of the acceptance of loans by private limited companies:

    Sl No

    Loan From

    Conditions

    1

    Shareholder/Member

    Yes, can accept subject to conditions specified in Deposit Rules

    2

    Director/Relative of Director

    Yes, can accept subject to the condition that the Director/relative of director shall give a declaration in writing that the money is given out of own funds and not out of borrowed funds

    3

    Employee

    Yes, can accept  up to the employee’s annual salary ( there should be a contract of employment with the company) in the nature of non- interest  bearing security deposit

    4

    Any Other Individual

    No cannot accept

    5

    Banks/other financial institution

    Yes can accept

    6

    Any Company

    Yes can accept subject to lender complying with conditions specified in section 179(3) and section 186 of Companies Act, 2013

Viewing 2 posts - 1 through 2 (of 2 total)