loan from shareholders by Private Limited Company

In this Article the discussion is all about the provisions of loan from shareholders by Private Limited Company, Process of acceptance of loan from shareholders, & Treatment of such loan in DPT-3.

 

LOAN FROM SHAREHOLDERS

 

·          Under the Companies Act,1956, it was allowed to the Companies to accept loan from shareholders and such loans is considered as non-deposit.

 

·         Under the Companies Act, 2013 it was “not allowed” to accept Loan/Deposit from shareholders.

 

EXEMPTION NOTIFICATIONS FOR PRIVATE COMPANY

 

·         MCA Notification No. G.S.R. 464(E) Dated 05th June, 2015 The Provisions of Deposits as prescribed under Chapter V, clauses (a) to (e) of sub-section (2) of section 73, of the Companies Act, 2013 Shall “NOT” apply to a private company which accepts from its “MEMBERS” monies not exceeding 100%, of aggregate of the paid up share capital and free reserves, and such company shall file the details of monies so accepted to the Registrar in such manner as may be specified.”

 

·         MCA Notification No. G.S.R. 583(E) Dated 13th June, 2017 Provides some conditions upon fulfillment of “ALL” such conditions which is prescribed, the then Provisions of Chapter V, clauses (a) to (e) of sub-section (2) of section 73, of the Companies Act, 2013 shall “NOT” apply to Private Limited. Following are the conditions prescribed under the said Notifications: -

 

(a) Such Private Company is “NOT” an associate or a subsidiary company of any other company.

 

(b)    if the borrowings of such Private company from banks or financial institutions or any body corporate is less than twice of its paid up share capital or fifty crore rupees, whichever is lower; and

 

(c)  such Private company has “NO” default in repayment of such borrowings subsisting at the time of accepting deposits under this section.”

 

PROCESS OF ACCEPTANCE OF LOAN FROM SHAREHOLDERS

 

Foll the below mentioned steps if any private company intends to take loan from shareholders

 

Step:1 First of all, you need to check whether the Company Falls under MCA Notifications dated 15th June,2015 or 13th June,2017 as discussed aforesaid.

 

Step:2 Second Company needs to hold Board Meeting of Directors under Section 179(3) of the Companies Act,2013 and Pass Board Resolution in the “BOARD MEETING”. Further Company at the same time issue Notice of General Meeting under Section 73(2) of the Companies Act,2013.

 

Step:3 Properly Convened the General Meeting of Shareholders and Pass OR in the General Meeting to accept loan from shareholders.

 

Step:4 Company shall do the Deposit Compliances by filing e-Form DPT-3 every year for such loan on or before 30th June.

TREATMENT OF SUCH LOAN IN DPT-3

There are 4 Radio Buttons in E-Form DPT-3 namely:-

i.             One Time Return of Deposit Pursuant to Rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014

 

ii.           Return of Deposit

 

iii.         Particulars of Transactions by a Company not considered as deposit as rule 2(1)(C) of the Companies (Acceptance of Deposits) Rules, 2014/(Exempted Deposits)

 

iv.         Return of Deposit and Particulars of transactions by a Company not considered as deposit.

 

It is Pertinent to note that Loan from shareholder is nowhere mentioned under the List of definition of deposit as mentioned in radio button 3(Exempted Deposit). Therefore, one can opinion that it will be considered as Deposit and Private Limited Company can accept the same by complying the MCA Exemptions Notifications as discussed earlier and have to select Radio Button 2 “Return of Deposit” while filing e-form DPT-3.

 

Note: Where the Company has taken any loan from Director then it shall be covered under Exempted Deposits always Pursuant to rule 2(1)(C) of the Companies (Acceptance of Deposits) Rules, 2014 and if such person is both director as well as Shareholder of the Company then whether such transaction is loan from director or loan from shareholders it totally depends upon the compliances done by the Company for acceptance of such loans.

 

If Company has complied with provisions / compliances of Loan from Director then consider this as Loan from Director and disclosed in “Exempted Deposits” (Radio Button 3 in e-Form DPT-3) in DPT-3.

If Company has complied with provisions / compliances of Loan from shareholders than consider this as Loan from shareholder and disclosed in “Return of Deposits (Radio Button 2 in e-Form DPT-3)” in DPT-3.

 

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