Loans, Deposits & Exemptions under Companies Act, 2013: Clearing the Confusion
The Companies Act, 2013 lays down strict provisions for acceptance of deposits by companies. Sections 73–76 and the Companies (Acceptance of Deposits) Rules, 2014 regulate this area. However, the framework also provides specific exemptions for private companies. These exclusions often create confusion, particularly around shareholder and director loans. 1. Loan from director or director's relative: Rule 2(1)(c)(viii) : Any amount received from a person who, at the time of receipt, was a director or a director's relative , is not considered a deposit . Conditions: Only applicable to private companies. Disclosure in Board’s Report. Obtain a declaration that the loan has been given out of own funds, and not being given out of funds acquired by him/ her by borrowing or accepting loans or deposits from others. . 2. Loan from shareholders MCA Notification No. GSR- 583(E) dated 13th June, 2017 granted further relief to private companies by exempting them from S...