Can a pvt. ltd. Company take ? - income tax.. CiteHR

lalanjee jha Started The Discussion:

Dear Sir, Can a pvt. ltd. Company take loan from individuals being outsiders . Kindly clarify me as per Company Act and Income Tax Act. Thanks & Regards L.Jha

Avika -  Member Since: Aug 2008
Yes it can if it is authorised by its Articles of Association and the borrowing is within the limits specified under the Companies Act and the full compliance of the provisions are made.

We can help you in a legal opinion and implementation of the same if you wishto avail our services.

Please feel free to contact us.

pca -  Member Since: Apr 2008
Dear friends,

Sorry, a pvt co. by its very definition contained in Sec.3(1)(iii)(d) of Companies Act 1956 is prohibited from accepting deposits from persons other than its members, directors and their relatives other than prescribed in Companies (Acceptance of Deposits) Rules 1975. Here deposit includes loans (Ref.Explanation to Sec.58A).


Dr. Harpreet Kaur -  Member Since: Dec 2007
Section 3(i)(iii) of the Companies Act, 1956 prohibits any invitation or acceptance of deposits by a private company from persons other than its members, directors or their relatives. This means that there cannot be any public issue by a private company for acceptance of deposits or debentures, loans etc. but through private contacts it can borrow.
Dr. Harpreet Kaur
Associate Professor (Business Laws)
Greater Noida

hc.subbaramu -  Member Since: Sep 2009
Dear Pals, Mr. Agarwal’s views are correct. Thanks HC. Subbaramu HR Consultant, Bangaluru

R.J.Nair -  Member Since: Dec 2007
No. Pvt Ltd companies are not allowed to take loans from outsiders i.e. who are not members of the company, which is again limited to 50 members.

Dr friends, please do not mislead people with wrong adv as given by siddharth,Avika, Sajid. A piece of advise: individuals dealing with company law related issues should speak to preferably a Professional Practising Company Secretrary or at least a chartered Accountant, who will be able to advise and suggest remedies than asking questions to individual who are not professiionals related to specific area. "Some of the opinions posted looks like a "Phd doctor treating a sick person instead of a medical doctor".
rj nair
988 65 23 182

Avika -  Member Since: Aug 2008
Dear All, I m sorry for the inconvenience as I had interpreted the question wrongly. Thanks, -  Member Since: Jan 2008
Hi, My company is a Pvt Ltd Co and we have taken almost all banks loan. Ask your account team to aplly for it. MK

ranrim -  Member Since: Nov 2009
yes, the pvt ltd co. can take a loan from individuals,but the amount of such loans can never be more than Rs20,000.Take an example.
loan taken-20000,
repaid -4000
taken again-3000-admissable,
taken again-3000-not admissable as here at this point it crosses Rs20000 limit


  • Do not post anything derogatory about any company or person.
  • Sharing articles from other websites should be done by posting a link to the original article.
  • To discuss sensitive issues create a pseudo/anonymous account.
  • Please avoid repeat posting your company profile - such accounts are removed automatically.
  • Found This Useful? +Vote Up This Via Google.  

    Why Vote? User validation is extremely important for good content to prosper.
    Disclaimer: This network and the advice provided in good faith by our members only facilitates as a direction towards the actions necessary. The advice should be validated by proper consultation with a certified professional. The network or the members providing advice cannot be held liable for any consequences, under any circumstances.

    Cite.Co helps people come together to solve each other's problems on all aspects of professional life.
    Share This Discussion:

    3M Users, 100K+ Documents & 450K+ Discussions
    About Us - Advertise - Contact Us - RSS   On Google+  
    All trademarks and copyrights held by respective owners. Member comments are owned by the poster.
    Privacy Policy | Disclaimer | Terms Of Service
    Facebook Page | Follow Us On Twitter | Linkedin Network