Question ID :
44591
Loan from Directors or Relatives of Directors in case of Private Limited Companies
a) Can a private limited company accept loan from a sole proprietorship concern, where relative of one of the director of the company is the proprietor?
b) Can a private limited company accept loan from a partnership firm, where relative of one of the director of the company is one of the partners?
Posted by
ALOK NATH SAHA
on
Jan 09, 2024
Filed Under
Companies Act, 2013
Yes Company can accept after passing necessary resolutions.
Posted by
VINAY BHARGAV KUMAR G on
Jan 10, 2024
Answer ID :
85272
Refer Sec 2(31) and Chapter - V of the Companies Act
Posted by
CA MAHESH T on
Jan 19, 2024
Answer ID :
85302
The loan from relatives of the director is exempted only in the case of a private company. However, the money given by the relative of a director should not be out of borrowed funds. Board meeting to pass the resolution for accepting a loan and approval of limit. Get a signed declaration from the Director or his / her relative that the money given is not out of borrowed funds. Get the loan agreement with all terms and conditions signed. File e form DPT-3. Disclose the details of such amount in the Board’s Report. Disclosure of amounts received from relatives of directors out of their own funds, in Financial Statements (in Notes to the Accounts).
No can't take loan because as per clarification, partnership firm is not a legal entity.
Posted by
Hari Beldona on
Feb 03, 2024