by Audit Analyst | Aug 20, 2025 | Private Limited Company
1. Legal Permissibility The Companies Act, 2013 permits private limited companies to borrow money, including loans from banks No specific prior approval is needed unless specified in the Articles of Association (AoA) or exceeds borrowing limits The board of directors...
by Audit Analyst | Aug 20, 2025 | Private Limited Company
1. Legal Provision – Section 186 of the Companies Act, 2013 Governs loans, guarantees, and investments made by a company to other entities A company may lend to another company up to 60% of its paid-up share capital, free reserves, and securities premium or 100% of...
by Audit Analyst | Aug 20, 2025 | Private Limited Company
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...
by Audit Analyst | Aug 20, 2025 | Private Limited Company
1. Limited to Unpaid Share Capital Shareholders are liable only to the extent of the amount unpaid on the shares they hold If shares are fully paid, their liability is zero, even if the company incurs losses or faces bankruptcy This protection encourages investment...
by Audit Analyst | Aug 20, 2025 | Private Limited Company
1. Holding Company–Subsidiary Relationship A private limited company can become a holding company by owning more than 50% of the share capital or controlling the board of another company The owned entity becomes a subsidiary company The relationship must be reported...
