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Dear All, Please advise whether company can take interest free loan form director and also in case of loan to wholly owned subsidiary company from holding company. Thanks

Director

Posted By: Nidhi goel 9 year(s) ago

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Nidhi Goel

Thanks a lot Hitesh, SSK and Anil.

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Anil

I concur to SSK and Hitesh.

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SSK

As per rule 2(viii), company can accept deposit fom director, provided he furnishes to the company at the time of giving money, a declaration in writing to the effect that the amount is not being given out of the funds borrowed by him from others.

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Hitesh

Yes, Company can take interest free loan from Directors. But as per the provisions of the Section 186(7) of Companies Act, 2013, the Company which is not exempted from the provisions of section 186 as per section 186(11), can not give interest free loan to subsidiary company. Further, we should check the provisions of transfer pricing under the Income Tax Act, 1961.

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Nidhi Goel

Thanks Hitesh. As wholly owned subsidiary is exempted from the prov. of section 186, it can accept interest free loan from its holding? Pls.advise.

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