1. Permitted Under Companies Act

• A private company can accept unsecured loans or deposits from its directors
  
• Allowed under Section 73(2) of the Companies Act, 2013, and Companies (Acceptance of Deposits) Rules, 2014
  
• The director must give a declaration that the funds are not borrowed from others

2. No Limit on Amount

• There is no cap or monetary limit on the amount a director can lend to the company
  
• However, the company must ensure it can repay the loan and record it in its financial statements

3. No Need for Shareholder Approval

• Unlike loans from other parties, no special resolution or prior approval is required for loans from directors
  
• Must be approved by the board of directors and recorded in the minutes

4. Documentation and Disclosure

• The director must provide a written declaration confirming the loan is from own funds
  
• Details must be disclosed in the company’s board report, financial statements, and annual return
  
• Interest on the loan (if applicable) should be paid as per the agreed terms

5. Not Treated as Public Deposits

• Loans from directors are exempted from the definition of “public deposits”, provided the declaration condition is met
  
• This exemption helps avoid compliance burdens applicable to public borrowing