Hello Ffriends.
can a private limited company accept public deposit?? if not, then how will unsecured loand will be treated under companies act?
please helpful reply
sunil (service) 18 June 2009
Hello Ffriends.
can a private limited company accept public deposit?? if not, then how will unsecured loand will be treated under companies act?
please helpful reply
Manish Singh (Advocate) 18 June 2009
A private co. cant accept public deposit but can accept deposits or so from their close circle or through private placement.
coming to the question of unsecured loan, there is a difference between accepting public deposit and loan/. a pvt co is not barred from taking loan from third parties and it can be very well mde secured by pledging shares or other assets of the company.
PC Agrawal (PCS) 18 June 2009
As per Sec.3(1)(iii)(d) of the Act private companies are prohibited from accepting deposits from persons other than its members, directors or their relatives. As per Explanation to Sec.58A(11) "deposit" means any deposit of money with and includes any amount borrowed by a company but shall not include categories of amount specified in Companies Acceptance of Deposits Rules 1975. As regards unsecured loans, Rule 2(b)(xi) provides for conditional exclusion as under:
any amount brought in by the promoters by way of unsecured loans in pursuance of stipulations of financial institutions subject to the fulfilment of the following conditions, namely :
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