Loans by Private Limited Companies
Loan taken by a Private Limited Company section 180. The company has to call a
meeting of the Share Holders and pass a Special Resolution for taking the loan.
For passing the special resolution the Board of directors shall take necessary steps
for ceiling the meeting of share holders.
Once the special resolution is passed the board of directors can borrow. The power
of borrowing can be delegate to any committee, MD or any principal office of the
company. The resolution for borrowing has to be filled with Registrar of Companies.
The earlier exemption available to Private Limited Company no more exists. The
Question of passing Special Resolution will arise only if the money to be borrowed
exceeds the aggregate of share capital & free reserves, other than temporary loans
taken from company’s banker in the normal course of business.