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Author Topic: Section 8 company Loan From Private Ltd.  (Read 446 times)

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Offline karthikshenoy@outlook.com

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Section 8 company Loan From Private Ltd.
« on: January 08, 2018, 11:40:17 PM »
Hello,

Hope some one can help me out with this...

Iím a director for 2 different companies ( both being startupís). 1 company is a private limited and other Section 8 company.

I want to transfer money from pvt ltd. to section 8 company, as we have bootlegged this money for business from family, friends and self

Can this money which is transferred be treated as a interest free loan to section 8 and whether this funds can be taken back by the pvt ltd ones the section 8 stabilises or starts raising funds from Though CSR

Your feedback shall be very valuable

Thank you in advance

KS

Offline CS SREENU THULASIDHARAN

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Re: Section 8 company Loan From Private Ltd.
« Reply #1 on: January 16, 2018, 05:41:51 AM »
Hello,

Hope some one can help me out with this...

Iím a director for 2 different companies ( both being startupís). 1 company is a private limited and other Section 8 company.

I want to transfer money from pvt ltd. to section 8 company, as we have bootlegged this money for business from family, friends and self

Can this money which is transferred be treated as a interest free loan to section 8 and whether this funds can be taken back by the pvt ltd ones the section 8 stabilises or starts raising funds from Though CSR

Your feedback shall be very valuable

Thank you in advance

KS

A Private Company can give loan to another company having common directors, if it satisfies the following conditions

  • No body corporate should have invested in the shares of the private company
  • Borrowings by the private company from banks/financial institution/body corporate shall not exceed twice its paid up capital or 50 crore,
     whichever is less
  • private company should not have defaulted in repayment of such borrowings at the time of giving loan

If the private company satisfies aforesaid conditions, it can give loan to the other company in which you are director. However, the company shall charge a rate of interest not less than the prevailing yield of 1 year/3 year/5 year or 10 year government security closest to the tenor of the loan.

Note: Compliance's with respect to section 186 of Companies Act, 2013 with regard to resolutions and registers should be followed



The above answer is only for informational purpose and not a substitute for professional legal advice.
« Last Edit: January 16, 2018, 05:43:45 AM by CS SREENU THULASIDHARAN »
SREENU THULASIDHARAN NAIR
M.COM, ACS
COMPANY SECRETARY IN PRACTISE
consult@sreenuonline.com

Offline kalaskarkk

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Re: Section 8 company Loan From Private Ltd.
« Reply #2 on: January 18, 2018, 09:16:32 AM »
Dear Sir,

It is possible with some restrictions and on some requirements.....please visit the end link...

The Ministry of Corporate Affairs ("MCA") notified on June 5, 2015 that certain provisions of the Companies Act, 2013 ("2013 Act") shall not apply to private limited companies or shall apply with such exceptions or modifications as directed in the notification (the "Notification").

https://www.quora.com/Can-loans-be-given-from-one-private-company-to-another-having-same-directors
Regards:

Kishan Dutt Kalaskar
Retd Judge and Advocate
No.74, 1st Floor, ďDisleyĒ  House,
Malleswaram, Bengaluru-560003.
Mob: 9686971935, 080-23461189
kalaskarnetra@gmail.com
Call me for clarification

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