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How to take Loan From Director to Private Limited Company

A private limited company is the most accepted and popular business structure in India and is governed by the provisions of the Companies Act and rules made thereunder, to carry out business operations loan from director to company is the main source of debt funding private limited access.

In every type of business structure there are two main sources of funds that an organisation deals with, one is in the form of capital and other is in the form of loan or debt. 

In case of a company accepting funds from the capital it has to issue shares,  and if the company is accepting funds from loan there should be an agreement with respect to the terms and conditions assigned to the particular loan and the security provided for a given loan. 

In this article we will discuss accepting loans from the directors of the company by a private limited company. 

Please note that accepting any type of loans or money from any person in a private limited company falls under the provisions of companies acceptance of deposit rules 2014 

“deposit” includes any receipt of money by way of deposit or loan or in any other form, by a company, but does not include

“(viii) any amount received from a person who, at the time of the receipt of the amount, was a director of the company or a relative of the director of the Private company:

Provided that the director of the company or relative of the director of the private company, as the case may be, from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others and the company shall disclose the details of money so accepted in the Board’s report;”

Loan from Director to Company
Loan from Director to Company

Step by step procedure for accepting loans from directors to Company

  • hold Board meeting and pass necessary resolution approving the limit up to which company can accept loans

The company is required to hold the board meeting and pass necessary resolution in this regard for approving the limit of loan up to which company can accept the loans. 

  • Pass Resolution for Authorising Director to sign Necessary Terms and Conditions /Loan agreement for the loan 
  • Accept at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others
  • Credit of Funds to Company Bank Account 

Compliance with Respect to Loan : If the Loan Agreement or Terms of Loan Contains clause  relating to the conversion of this loan into equity  then the company is required to file form mgt 14 within  30 days from the date of such agreement

Annual Compliance with respect to loan from Director to Company : 

As this loan is exempted from the deposit, the company is required to file Form DPT -3  with the amount of loan accepted from Directors of the Company under the column, Items Not considered as Deposits  

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Company Fresh Start Scheme – 2020 , File Company Returns without Additional Fee

What is this Company Fresh Start Scheme – 2020 (CFSS-2020)  for

Company Fresh Start Scheme -2020 is for Waiver for Payment of Additional Fee for Filing of E forms with ROC/MCA and Immunity from launch of prosecution or proceedings for imposing penalty

Applicable for

  • Companies which has not filed Annual Return and Financial Statements to ROC /MCA i.e. Form AOC-4, AOC-4 XBRL, AOC-4 CFS,  Form MGT-7
  • Companies which has not filed any E Forms that are required to be filed to ROC /MCA and not filed i.e. Form MGT-14, ADT-1, Form DPT-3 , Form DIR-12, Form 20A, INC 22

Period for Which Returns Can be filed under CFSS-2020

  • From 01-04-2020 to 30-09-2020

Fee Payable for Filing of Documents

  • Normal Filing Fee

What is Form CFSS-2020

  • E Form
  • Required to be Filed with MCA
  • Within 6 Months after the End of the Scheme
  • No Filing Fee for E Form CFSS-2020

Non Applicability of CFSS-2020

  • Company under Strike off
  • Amalgamated Companies
  • Applications filed for obtaining Status of Dormant Companies
  • Vanishing Companies
  • Form SH-7 for Increase in Authorized Share Capital
  • Form CHG-1 , CHG-4, CHG-8, CHG-9 related to Charge

Inactive Companies

Shall File

  • Application for Obtaining Status of Dormant Company
  • STK-2 for Strike of Name of Company

Action by ROc/MCA

  • If Pending Returns/ Documents are not filed
  • MCA/ROC will take action as per provisions of Companies Act, 2013 which provides for very high penalties
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How to Change Main Object Clause Of MOA of Private Limited Company (7 Steps)

object clause

If a Private Limited company wish to undertake any object (New Business Activity) which is not mentioned in its MOA, and the company wants to start up a new business which is not as per it’s MOA then, it should make a change in its main object by Following the procedure mentioned below

object clause

Step by Step Procedure for Change in Object Clause of MOA of Company

Time Requierd 25 days

Hold Board Meeting and send Notice for Extra Ordinary General Meeting for change in Object Clause

Object Change

The first step for change in object clause of the MOA of the company is to hold Board meeting of the Company, in the board meeting main agenda should be to hold an Extra-Ordinary General Meeting of the Company.

Hold Extra-Ordinary General Meeting on the specified date for the change in Object Clause

object clasue

Now hold the extra Ordinary general meeting of the Company, in this regard do necessary legal and procedural requirement at venue of general meeting

 
Pass Resolution by taking approval of Shareholders for change in Object Clause

Now start the proceedings of general meeting and pass required resolution for change in main object of the company, resolution is required to be passed by requisite approval of shareholders of company

Get true certified copies of all the documents and resolutions in respect to change in Object Clause

object change

Once all the approval of shareholders are received , any director of company or authorized person will prepare necessary documents , like certified copies of all the documents and resolution , Following documents certified copies is mandatory required to be arranged :
1. Altered MOA of the Company
2. Resolution passed at EGM of the Company

File MGT-14 with all the Resolutions and Altered MOA

Once the above requirements are complete in all respect, Company is required to file E Form MGT-14 to Registrar of Companies with payment of fee.

Approval of E form MGT-14 for Change in Object of the Company

approval of MGT-14

Once e Form MGT-14 is filed with ROC , the ROC will check and verify the correctness of the Form and will if deems fit approve or send back the e form

Certificate of Registration for Change in Object Clause of the Company

Certificate for Object Change

Once the E form MGT-14 is approved by ROC , the Company will receive the email in this regard along with Certificate.

Once all the above is completed, complete all the required certificate and altered MOA in single set as new set of MOA of the Company.

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How to Change Name of Private Limited Company

In this article we will discuss about procedure for Change in Name of Private Limited Company , A Private Limited company can change its Name with the Approval of Shareholders via Special Resolution and Central Government , for Change in Name of Company Following procedure is required to be followed :

Procedure for Change in Name of Private Limited Company :

  1. Hold Board Meeting and Pass Resolution for Application to ROC for approval of new Name, Please note that resolution should clearly mention the New Name
  2. Apply New Name in RUN form along with Resolution of Board for new Name , Certified True copy of Resolution should be attached. Get name Approval from CRC.
  3. Hold Board Meeting and Send Notice for Holding Extra Ordinary General Meeting
  4. Hold Extra Ordinary General Meeting of Members of the Company
  5. Pass Special Resolution
  6. Get the Certified true Copies of Resolution passed at Extra Ordinary General Meeting  of all the documents signed along with Copy of Altered MOA and AOA of the company
  7. File form MGT-14 with ROC
  8. Once form MGT-14 is approved , File Form INC-24 for Change in the Name of the Company
  9. Once INC-24 is approved , you will receive , new certificate after change in the name of Company
  10. Apply for Changes in PAN Card of the Company
  11. Apply for Change in GST Registration and any Other statutory Registrations

NOTE: The old name should be written along with the new name in all the documents of the company for two years.                   ( FORMERLY KNOWN AS ———-)

Do you need any help for Change in Name of your Company , Please email us at [email protected]

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Last Date for Filing Form CRA-4 (Cost Audit Report ) for FY 2018-19 Extended to 31st December, 2019

MCA has extended Last Date for Filing Form CRA-4 (Cost Audit Report ) for FY 2018-19 Extended to 31st December, 2019 due to development of Costing Taxonomy 2019, the companies that are required to file Cost Audit Report in CRA-4 are required to use Latest Taxonomy that is under process of development.

However those companies who have already filed form CRA-4 are not required to file fresh form.

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ROC Annual Filing Date for Form AOC-4, AOC-4 (CFS), AOC-4(XBRL) and Form MGT-7 Date Extended to 30th November and 31st December, 2019

MCA has extended date for Filing Form AOC-4, AOC-4 (CFS), AOC-4(XBRL) and Form MGT-7 Date Extended to 30th November and 31st December, 2019 by  Relaxation of additional fees under the Companies Act,2013

Keeping in view the requests received from various stakeholders seeking extension of time for filing of financial statements for the financial year ended 31.03’2019 on account of various factors , it has been decided to extend the due date for filing of e-forms AOC-4, AOC (CFS) AOC-4 XBRL upto 30.11.2019 and e-form MGT-7 upto 31.12.2019, by companies without levy of additional fee

 

Link of MCA Circular

http://www.mca.gov.in/Ministry/pdf/GeneralCircular_29102019.pdf

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Main Object of Stone Trading Company

  1. To carry on in India or elsewhere the business as manufacturers, producers, processors, importers, exporters, buyers, sellers, stockiest, agent, reseller, merchants, suppliers, crushers, shapers, polishers, grinders, converters, finishers or otherwise deal in all kinds of granites, marbles, stones, tiles, glazed tiles, limestone, slate stones, Chalk, Clay, Precious stones, kota stones and other stones or deposits, tiles and other related products.
  2. To purchase, or otherwise take on lease, acquire any mining rights, mines, quarrying, setting up cutting and polishing unit, trading in granite blocks, polished slabs, tiles, monuments, slate stone and marbles.
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Section 8 Company Registration- No Requirement to File INC -12

With the ease in incorporation procedure for Company , MCA has come out with another notification that waives off filing of form INC-12 for Section 8 Companies, form INC -12 was required to be filed to ROC after obtaining name approval of the Company for obtaining Licence for Section 8 Company. Once the Licence for Incorporation of Section 8 company is obtained , the Company Incorporation application in SPICE form can be filed.

Now MCA has substituted the Form INC -12 with SPICE form and SPICE form to be amended accordingly.

Further in case of draft memorandum , the word Memorandum , further this also eases the incorporation process , as draft MOA was required to be filed with INC-12 earlier when applying for section 8 Company licence.

In case of Existing Company Company wants to Apply for conversion into section 8 company , the form INC -12 will be required to file for Application for grant of License to an existing company under Section 8