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?

[Guest]

Since it is a company limited by shares, kindly first be guided by the provisions of Sec 58A of the Companies Act, 1956, before you avail the loan from the NRI, if he is not a shareholder of the company... Hencee clarify his status vis a vis the co

[Bakul Gandhi]

The company has to comply with the Companies Acceptance of Derposit Rules, 1975u/s 58A of the Companies Act 1956. It has to also comply with the Foreign Exchange Management Act, 1999. The deposits can ot be accepted from NRIs on Repatriation basis as it is discontinued from 2004. Again other RBI guidelines provide that the borrowing should not be for relending,, agriculture/plantaion activity or real esatate business.

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.