According to exemption notifications, private limited companies are permitted to take loans from their shareholders after completing the procedures outlined in section 73 of the companies act, 2013. If you are looking for the best tax consulting company then keep reading this blog as DPT-3 compliance is important while filling the annual tax.

Point of the editorial: In the e-form DPT-3, where should a loan from a shareholder be mentioned?

DPT-3 is separated into four remote buttons as an e-form:

1. Onetime return for a declaration of outstanding money or loans received by a company but not deemed deposits under rule 2(1)(c) of the companies ( acceptance of deposits) rules,2014

2. Deposit refunds

The details of a company’s transactions that are not deemed deposits under rule 2 (1)(c) of the companies (acceptance of deposit) rules, 2014

3. Return of deposits and particulars of transactions are not considered to be as deposits by the company

4. Deposit: It is not indicated anywhere in the definition of the deposit that firms can receive loans from shareholders. If a corporation (private or public) receives a loan from a shareholder, it is deemed a deposit and must comply with the provisions of section 73 of the companies act, 2013

Exemption notification: If a private limited business accepts a loan from its shareholders, it is not required to comply with the provisions of section 73 (2) (a) of act (e)

Provisions-loan from shareholders: private limited companies

• Under the companies act of 1956, it was permissible to accept loans from shareholders, which were treated as non-deposits
• Since 1st April 2014, it has been illegal to receive deposits from shareholders under the companies act of 2013

On the 13th of June, 2017, the MCA issued an exemption notification for private limited companies which states:

“ Chapter V, clauses (a) to (e) of subsection (2) of section 73, do not apply to a private firm that meets all of the following requirements :

• That is not a joint venture or subsidiary of another corporation
• If such a company’s borrowings from banks, financial institutions or any other entity is less than twice its paid-up share capital or fifty crore rupees, whichever is less
• At the time of receiving deposits under this section, such a corporation has not defaulted on repayment of such borrowings

Process- acceptance of a loan from shareholders:

Step 1

To determine if a corporation is exempt from taxation under the 05.06.2015 or 13.06.2017 exemption limits and to compute the amount that such a firm can take from shareholders.

Step 2

• To call a board of directors meeting u/s 179 (3)
• To pass a board resolution for borrowing
• To call a general meeting under section 73 (2)

Step 3

• To call a shareholders meeting under section 73 (2)
• To adopt an ordinary resolution accepting a loan from a shareholder

Step 4

At the time of acceptance of a loan, the company must file an e-form DPT-3

Step 5

Every year, on or before 30th June, the company must file an e-form DPT-3 for such a loan

Treatment- loan from shareholders:

According to the provision described above, a private limited company can receive a loan from its shareholders if it complies with section 73(2) clause (a)(e). However, such a loan from a shareholder is not listed in the definition of deposit’s exemption list.

First –

The loan from a shareholder will be considered a deposit for the private limited company. However, subject to the above-mentioned exemptions, such a PVT company can accept the same.

Second-

• The company must show such loan in the category of deposit every year when submitting e-form DPT-3
• The company must pick remote button no. 2 or 4
• The company must attach a certificate of statutory auditor for the same.

Consequences:

• Fine on contravention on section 73

1. In addition to the payment of deposit amount or a portion of it as well as the interest due.
2. Be subject to a fine of not less than one crore rupees or twice the amount of deposit accepted by the corporation, whichever is low, but not more than 10 crore rupees
3. Every corporate officer who is in default is subject to imprisonment up to seven years and a fine of not less than twenty-five lakh rupees but not more than two crore rupees.

• Punishment for non-filing DPT-3: rule 21

The company and every official of the company who is in default are liable for a fine of up to five thousand rupees, plus an additional fine of up to five hundred rupees for each day after the first day that the infringement persists.