Loan taken by companies from Indian and foreign directors

[abhishek jha]

Dear Friends,

Can anyone guide me the provisions in companies act if any company is taking loan from its foreign or indian directors

are there any restrictions or what are the compliance

Guide me the Section also

Urgent

Thanks and regards

[R V Seckar]

Hello Sir,

 

You have to give us more details:

 

1. Whether the company is  a private ltd company or public ltd company

 

2.Whether the company has availed already loan or yet to avail loan from directors?

 

3. Quantum of loan ?

 

Regards

 

R.V.Seckar

 

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[abhishek jha]

Sir,

Company is a private limited company registered in India

Have'nt availed loan yet

Quantum of loan is not yet decided

Are there any FEMA applicability is also there.

[R V Seckar]

Dear Sir,

 

Yes . If you avail loan from non-resident director , then ECB guidelines will be applicable.

 

Regards

 

R.V.Seckar

[abhishek jha]

Sir,

I wanna know the restriction and guidelines of companies act regarding this matter

[R V Seckar]

Dear Sir,

 

Ok . I will revert to you .

 

Can I have your contact number pl.

 

Regards

 

R.V.Seckar

[abhishek jha]

Sir,

Its 9899233250 

Thanks for your reply

[abhishek jha]

Sir.

Thanks for all your help

If there is any need of help related with FEMA i will revert back to you

Regards

Abhishek

[R V Seckar]

Dear Sir,

 

Thanks.

 

R.V.Seckar

[Kartheek C.N.]

Dear Seckar Sir,

Kindly inform where is it mentioned that if a company avails loan from a Non resident Director ECB guidelines will be applicable.

As per i am inform the Non resident Director is not an eligible person to grant an ECB to the Indian Company until he has certain % of equity in it.

Please clarify.

On Tue, Sep 4, 2012 at 6:16 PM, R V Seckar <rvsek...@gmail.com> wrote:

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C.N.Kartheek
karth...@gmail.com

[R V Seckar]

Dear Mr. Kartheek,

 

The view is given under the assumption that the non-resident director is also member of the company.

 

If the company wants to avail the loan from non-resident director , it has to comply with the ECB guidelines including alloting certain percentage of shares to such loan provider.

 

Regards

 

R.V.Seckar

[Aditya garg]

Dear  Seckar Sir,

Greetings for the day !!

I have studied Fema regarding this and i have a query.

under the borrowing and lending of money in rupees guidelines, there is a clause which says that the company can take loan from the NR director only by way of issue of NCD subject to some conditions.

and further in the conditions the first condition is to issue the NCD only by way of Public offer.

now my query is as our company is a private limited company, whether this condition of issuing NCD through public offer would be waived off or we, being a pvt. co. , can not use this clause.

i have visited RBI office regarding this but could get any answer.

Please help 

Regards

Aditya garg

[Aditya garg]

Dear Sir,

I have an another query also.

under construction activity , 100 % FDI is allowed under automatic route subject to some conditions.

the 2nd condition of minimum capitalization is as follows:-

"Minimum capitalization of US$10 million for wholly owned subsidiaries and US$ 5 million for joint ventures with Indian partners."

and the last line says that :- " The conditions at (1) to (4) above  would not apply to Hotels & Tourism, Hospitals,  Special Economic Zones (SEZs), Education Sector, Old age Homes and investment by NRIs".

 Now my query is that if an NR wants to invest in india in construction activities, 

whether 

• The NR is allowed to invest or not ?
• if he is allowed whether he has to comply the condition of minimum capitalization ?
• As the condition of minimum capitalsation is mentioned only for  WOS and JVs, does it two terms cover NRI also ?

i have read the given definitions and following is my understanding on the third query :-

JV means an indian entity in which foreign entity is investing.

foreign entity is no where defined in FEMA FDI.

now the question is whether foreign entity includes NR ( individual or not ) ?

Under "who can invest" the following is given 

"a non resident entity can invest."

now we have to check the two definitions 

1. resident entity 

2. non resident entity

Resident entity is "a person resident in INdia excluding an individual.

the definition of non resident entity says :- it means "person resident outside india" as per fema. ( which means it includes individual) 

the definition of "person resident outside india" says-  a person who is not a "person resident in india"

the definition of "person resident in india" says - a person who stays ......... ( that means includes an individual)

i have tried to be very much clearin asking  but FEMA is this only, apologies if any.

Thanks

[Sangeetha Chinnasamy]

Hi friends,

Can you clarify me the following querry

1.Is it possible to convert Loan from NRI director in private limited company into equity shares?

2. If so, what are the procedures?


Rgds

Sangeetha C

[Venkat Ragavan]

1. yes, it is possible.

2. Get valuation certificate from auditor

3. conduct BM

4. Get approval from RBI

5. then do the share issue formalities

Warm Regards,

V.Venkata Ragavan

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