Some questions related to deposits:

Q 1. Do company can raise fund by accepting Loan from LLP without falling under Deposits? If not what alternative can a company do to raise funds?

Ans. According to section 2(31) of Companies Act, 2013, a company accepting loan from LLP (Limited Liability Partnership) would be considered as Deposit.

However, Company can accept money as an advance from LLP subject to conditions given in the section.

As per the definition of Deposits in Companies Act, 2013 read with rule 2 says that:

Note: If the company don’t have required permission the amount would be refundable with or without interest and the amount would be deemed to be Deposits.

Q 2. How can a company accept Loan from its promoter who is not a member nor director of the company?

Ans. A company can accept Loan from its promoters only when the company have subsisting loan from bank or any financial institute and that particular institute gives a letter to company agreeing that the company can accept Loan from its promoter.

 According to section 2(31) of Companies Act, 2013, any amount brought in by the promoters of the company by way of unsecured loan in pursuance of the stipulation of any lending financial institution or a bank subject to fulfillment of the following conditions, namely:-

(a) loan is brought in pursuance of the stipulation imposed by the lending institutions on the promoters to contribute such finance;

(b) loan is provided by the promoters themselves or by their relatives or by both; and

(c) exemption under this sub-clause shall be available only till the loans of financial institution or bank are repaid and not thereafter.\

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