Loans by the Directors to Company: According to the arrangements of business rules (Acceptance of deposits) “any quantity given by the directors to the company will not be covered under deposits under this law”. “If the company receives any loan or advance from an individual who at the time of offering the quantity is a director of that business then it doesn’t consider as deposits which are covered by the act”.
According to the act no director is enabled to offer any amount of money to the business as loan, without giving a statement in a written kind that the amount he is giving is not being the loans, loanings, deposits he obtained from others.
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Crucial points:
( 1) Board of directors resolution:
If the amount of loan which the business is getting is listed below the limit defined under act then the resolution passed for this purpose must be informed to ROC through Submitting the kind MGT-14
The limit for this function is” Paid up share capital Totally free reserves”
When ever the amount of loan being that is accepted by the business is more than the limitation specified under the act then interaction of unique resolution passed for this purpose to ROC should be done by submitting kind MGT-14
While checking whether the amount of loan is within the limits or not, “the loan amount already accepted from the directors also need to be thought about for getting to the total allowable amount”
( 2) It’s not needed to pass resolution every time as and when the company accepts the loan from directors.
At first the business can pass a resolution in the board conference for a quantity which is greater than what it is going to accept at the motion. This can be done only when the total amount for which the resolution is being passed is within the limits.
If the overall quantity for which the resolution is being passed is above the limit defined under the act then an unique resolution in basic conference should be passed.Later for which the board of directors will pass a resolution accepting the quantity in board meeting. This resolution likewise shall be interacted in the type mgt 14
( 3) Form MGT-14:
Based On Section 117( 1 ), specific resolutions and arrangements as required by section 117( 3) are needed to be submitted with ROC through filing kind MGT-14 Section 117( 3) likewise refers matter given up section 179( 3) are likewise needed to be reported through MGT-14
Therefore form is implied for divulging the interest of directors in the company.
The resolution must be communicated through type MGT 14 within a period of 30 days commencing from the date of resolution.
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