The table below outlines the entities or persons from whom a Private Limited Company may borrow funds :-
| Sr. No. | Entity/ Person | Allowability of the Loan | |
| 1 | Director | Allowed, provided a declaration is furnished by the director that the amount has not been given out of funds acquired by him by borrowing or accepting loans or deposits from others | |
| 2 | Relative of Director | Allowed as Ministry of Corporate affairs vide its notification dated 15.09.2015 has provided that w.e.f. 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 | |
| 3 | Shareholders | Where money accepted from members exceeds 100% of the Paid up share capital and free reserves. | Where money accepted from members does not exceed 100% of the Paid up share capital and free reserves. |
| Not allowed | Allowed subject to: Passing a members resolution,n Making provision for security, ifn any for due repayment of the amount of deposit accepted and interest thereon (not less than 12.5% at present) including creation of charge (Form CHG1) on the property or assets of the Company. Filing the details of the moneyn accepted with the registrar. | ||
| 4 | Relative of Shareholders | Not allowed as such a borrowing may take place nevertheless, subject to the fulfillment of conditions as prescribed in Section 73 of the Companies Act, 2013. | |
| 5 | A person who is Director& Shareholder Both | Allowed, provided a declaration is furnished by the director that the amount has not been given out of funds acquired by him by borrowing or accepting loans or deposits from others. | |
| 6 | Employee | Allowed The Amount borrowed must not exceed the employees’ annual salary in the nature of interest free security deposit. | |
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We have a pvt ltd company and there is a investor who wants to invest in the company….can we take loan from such individual and if not what are the ways in which we can receive funds from him?
Is it that we need to first make him a share holder????
Greetings !
Can the director offer their FD as security to the bank to avail loan for the Pvt Ltd co. ( the FD may be from Borrowed money by the director ) as there is no direct loan to the company by the director
Can A Company Accept loan from the person who is influencing the Company
What if at the time of accepting loan from Individual he was director of the company but after few years he is not director of the company? Is company liable to repay the same or can continue with the said loan?
Allowed subject to: Passing a members resolution,n Making provision for security, ifn any for due repayment of the amount of deposit accepted and interest thereon (not less than 12.5% at present) including creation of charge (Form CHG1) on the property or assets of the Company. Filing the details of the moneyn accepted with the registrar.
is this statement correct ? As regards rate of interest ? For NBFCs the RBI stipulation is the maximum ceiling of 12.5% . Not minimum .
Can a private company fulfilling the required criteria, accept deposit/ loan from members with zero interest?
can a private company accept funds from a trust?……if yes on what terms?
But if a LLP is a MEMBER of a Company, then in this case,that Company may receive loan from its (member) LLP, isn’t it?
Dear mam,
what if at the time of receipt of money he is director and at the time of filling Dpt-3 (as it cover under exempted deposit and detail is provided for non deposit transaction to) he is neither a director nor a shareholder than what we consider that amt for pvt. company. please answer
Can a newly formed private limited company take loan from any bank or financial institution?
WHAT TO DO IF UNSECURED LOAN HAS BEEN TAKEN FROM OUTSIDER IN A PVT LTD
HELLO MAM,
PLZ SUGGEST ME..WHAT REMEDY CAN BE SOUGHT ..IF UNSECURED LOAN HAS BEEN ACCEPTED BY OUTSIDER IN A PVT LTD????
Can Private Company accept interest free loan from its Director? what are the compliances and will it be treated as deposit?
Madam
My question is what are procedure for private company get loan form its Directors.?
2. IF amount exceed Share capital and free reserve is required make special resoultion and file with ROC form MGT-14?
3. IF amount not exceed share capital and free reserve is required to make board resolution and file with ROC form MGT-14?
i want answer for this question , Thanks in advance
Being an individual, can I borrow money from Bank and lend to a private LIMITED company against security of the land owned by a private LIMITED company vide MORTGAGE WITH CONDITIONAL SALE AND PART EXTENT BY ABSOLUTE SALE DEED. Already the scheduled property is with a finance company with simple MORTGAGE, GPA
1. Can a private company take loan from its members who is individual.
2. Can a private company take loan from its member if such member is Body Corporate.
Please answer for loan not for deposit.
as per notification dated 13.06.2017, private limited company can accept deposit without any limit, if it fulfils 3 criteria and file DPT 3 every year.
can the company borrow from a related entity ie apartnership firm in which the director is a partner
what is the position if shareholder who is a relative of director?
Can you please tell me which section tells about it
Nice article. Simple to be understood.