TaxTMI 
TaxTMI 
Can someone please provide checklist for Private limited company regarding acceptance of loans and deposits from the directors/shareholders/ relatives of directors and also regarding providing loans to directors, members or relatives. What are the restrictions, prohibitions and applicable law ? What are the penalties in each case of violation?
Loans and deposits in case of Private ltd company
27 May 2025 
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Prohibition on loans to directors requires statutory exceptions, disclosure and strict compliance, with penalties for breaches.
Acceptance of funds from directors or their relatives is excluded from deposit regulation when accompanied by a director's declaration that funds are not borrowed; such receipts require disclosure in financial statements and annual reporting in Form DPT-3. Companies may accept deposits from members subject to prescribed compliance and limited exemptions. Companies are broadly prohibited from advancing loans or providing guarantees for directors, relatives or related firms, save for narrowly defined statutory exceptions; breaches attract penalties on the company and officers and necessitate careful procedural compliance before related-party financing. (AI Summary)
Acceptance of funds from directors or their relatives is excluded from deposit regulation when accompanied by a director's declaration that funds are not borrowed; such receipts require disclosure in financial statements and annual reporting in Form DPT-3. Companies may accept deposits from members subject to prescribed compliance and limited exemptions. Companies are broadly prohibited from advancing loans or providing guarantees for directors, relatives or related firms, save for narrowly defined statutory exceptions; breaches attract penalties on the company and officers and necessitate careful procedural compliance before related-party financing. (AI Summary)