Loan from NRI to a private company

[gurmukh kotwani]

An indian pvt Ltd. co. wants to accept a loan of Rs. 1 crore from an NRI.can it be accepted and what are terms & conditions & formalities?

AI Summary

Indian Company Loan from NRI: Follow Section 58A, Companies Act 1956 & FEMA 1999; RBI Guidelines Apply An Indian private limited company inquired about accepting a loan of Rs. 1 crore from a Non-Resident Indian (NRI). The responses highlighted the need to adhere to Section 58A of the Companies Act, 1956, and the Companies Acceptance of Deposit Rules, 1975. Additionally, compliance with the Foreign Exchange Management Act, 1999, is required. It was noted that deposits cannot be accepted from NRIs on a repatriation basis since 2004. Furthermore, the loan should not be used for relending, agricultural or plantation activities, or real estate business, as per Reserve Bank of India guidelines.