MCA clarifies that Amounts received by Private Companies as loan from Members, Directors or Relatives prior to 01 April 2014 shall not be treated as Deposit

Much awaited relief is granted by the Ministry of Corporate Affairs vide its General Circular No. 05/2015, wherein it has clarified that amounts received by the Private Limited Companies from their members, directors or their relatives prior to 1st April 2014 shall not be treated as deposits in terms of Section 58A of the Companies Act 2013 and Companies (Acceptance of Deposits) Rules, 2014.

However the relief is subject to the condition that the financial statement for the financial year commencing on or after 1st April 2014 shall disclose, in its notes to financial statement, the figure of such amounts and the accounting head in which such amounts have been shown in the financial statements.

Further, any renewal or acceptance of the fresh deposits on or after 1st April 2014 shall be in accordance with the provisions of Section 58A of the Companies Act 2013 and the rules made thereunder.

The General Circular can be downloaded by clicking here –>General_Circular_5-2015 – Clarification on Deposits of Private Companies