Is it legal for a company to borrow money from an individual, and is it legal for an individual to b

Businesses can borrow money from specific individuals. Mutual lending between citizens and enterprises is a private loan, which is permitted by law, and can be found to be valid as long as the intention of both parties is genuine.

However, if an enterprise wants to raise operating funds from the public, it must meet the conditions prescribed by law and perform the procedures prescribed by law, otherwise, it will be illegal, and the perpetrator may even be punished by the criminal law.

Legal basis] Article 11 of the Supreme People's Court's Limitation on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases stipulates that if a private lending contract is concluded between legal persons, other organizations, or between them for the purpose of production and business operations, except for the circumstances specified in Article 52 of the Contract Law and Article 14 of these Limitations, the people's court shall support the party's claim that the private lending contract is valid.

According to Article 1 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases, the term "private lending" as used in these Provisions refers to the act of financing between natural persons, legal persons, and other organizations and among themselves. As a result, businesses can borrow money from individuals.

The court will handle loan cases in accordance with the principles of voluntariness, mutual benefit, fairness and legality, protect the legitimate rights and interests of creditors and debtors, and restrict usury.

The following situations are invalid loans:

Enterprises illegally raise funds from employees in the name of loans;

Enterprises illegally raise funds from the public in the name of loans;

Enterprises issue loans to the public in the name of loans;

Other violations of laws and administrative regulations.

According to the regulations, as long as the agreed interest rate is less than four times the interest rate of the same type of bank loan, and there is no act prohibited by law, it is legal and valid and should be protected by law.

Reference] Personal Loan --- Encyclopedia.

Legal Analysis: It is legal for a company to borrow money from an individual under normal circumstances. Circumstances in which it is legal for a company to borrow money from an individual:

Loans between citizens and non-financial enterprises (hereinafter referred to as enterprises) are private loans. As long as the intention of both parties is true, it can be found to be valid. However, in any of the following circumstances, it shall be found invalid:

1. Enterprises illegally raise funds from employees in the name of loans; 2. Enterprises illegally raise funds from the society in the name of loans; 3. Enterprises issue loans to the public in the name of loans; 4. Other violations of laws and administrative regulations.

Legal basis: Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases

Article 14: In any of the following circumstances, the people's court shall find that a private lending contract is invalid:

1) Arbitraging credit funds from financial institutions and lending them to borrowers at usurious interest, and the borrowers knew or should have known about them in advance;

2) Where funds obtained by borrowing from other enterprises or raising funds from the employees of the unit are then re-lented to the borrower for profit, and the borrower knew or should have known in advance;

3) The lender knew or should have known in advance that the borrower was borrowing money for illegal or criminal activities, but still providing the loan;

4) Violating public order and good customs;

5) Other violations of mandatory provisions on the effectiveness of laws or administrative regulations.

Article 23: Where the legal representative or responsible person of an enterprise signs a private lending contract with a lender in the name of the enterprise, and the lender, enterprise or its shareholders can prove that the loan is for the personal use of the legal representative or responsible person of the enterprise, and the lender requests that the legal representative or responsible person of the enterprise be listed as a co-defendant or a third party, the people's court shall approve it.

Where the legally-designated representative or responsible person of an enterprise signs a private lending contract with a lender in his or her own name, and the borrowed money is used for the production and operation of the enterprise, and the lender requests that the enterprise and the individual jointly bear responsibility, the people's court shall support it.

It is generally legal for a company to lend money to an individual. The loan contract is a contract in which the borrower borrows money from the lender, returns the loan at maturity and pays the interest on the loan. Loan contracts established in accordance with law are protected by law, and the interest on the loan shall comply with the provisions of law.

However, the company shall not provide loans to directors, supervisors and senior management directly or through its subsidiaries.

[Legal basis].Article 667 of the Civil Code of the People's Republic of China.

A loan contract is a contract in which the borrower borrows money from the lender and returns the loan at maturity with interest.

Article 668.

The loan contract shall be in written form, unless otherwise agreed upon between natural persons.

The content of the loan contract generally includes the type of loan, currency, purpose, amount, interest rate, term and repayment method.

Article 115 of the Company Law of the People's Republic of China.

The Company shall not provide loans to directors, supervisors and senior management directly or through its subsidiaries.

Legal Analysis: Under normal circumstances, it is legal for an individual to borrow money from a company. In general, the company's borrowing from individuals must meet the conditions of the company's articles of association and be approved by the shareholders' meeting or the general meeting of shareholders.

Article 1, Paragraph 1 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases stipulates that the term "private lending" as used in these Provisions refers to the act of financing between natural persons, legal persons and unincorporated organizations.

According to Article 667 of the Civil Code, which was born in 2021, a loan contract is a contract in which the borrower borrows money from the lender and returns the loan at maturity and pays interest.

Legal basis: Article 1, Paragraph 1 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases.

The term "private lending" as used in these Provisions refers to the act of financing between natural persons, legal persons and unincorporated organizations.

Article 667 of the Civil Code of the People's Republic of China A loan contract is a contract in which the borrower borrows money from the lender and returns the loan and pays interest when due.

It is legal for a company to borrow money from an individual, and there is no provision prohibiting a company from borrowing money from an individual.

When the company borrows money from a shantyman, the accounting treatment is: borrowing: bank deposits and other accounts, credit: other payables - a certain person.

When repaying the loan to the individual, the accounting treatment is rotational, borrowing: other payables - a certain person, credit: bank deposits and other accounts.

Companies can lend funds to individuals. The Company Law stipulates that the directors and senior managers of a company shall not lend the company's funds to others in violation of the provisions of the company's articles of association or without the consent of the shareholders' meeting or the general meeting of shareholders. Therefore, for those who comply with the provisions of the company's articles of association or with the consent of the shareholders' meeting or the general meeting of shareholders, the company's funds can be lent to others.

The definition of private lending heard by the court clarifies that private lending includes natural persons, legal persons, and other organizations, as well as financing between them. The Reply of the Supreme People's Court on How to Confirm the Validity of Lending between Citizens and Enterprises stipulates that loans between citizens and non-financial enterprises are private loans and can be deemed valid as long as the intentions of both parties are genuine.

1. The amount of interest on the loan is legitimate.

The main provisions on the interest rate of private lending are as follows:

1) If the annual interest rate does not exceed 24, it is legal and valid. If the interest rate agreed upon by both parties does not exceed 24 per annum, and the lender requests the borrower to pay interest at the agreed interest rate, the people's court shall support it.

2) If the annual interest rate exceeds 24 and is less than 36, it shall be according to the wishes of the parties. A private loan with an annual interest rate of 24 36 is a natural debt, and if a lawsuit is filed, the court will not protect it, but the parties are willing to perform it automatically, and the court will not object, and the borrower cannot demand the return of the interest that has been paid.

3) If the annual interest rate exceeds 36, it will be partially invalid. If the interest rate agreed upon by both parties exceeds 36 per annum, the interest agreement on the excess part shall be invalid. Where the borrower requests the lender to return the interest paid in excess of 36 per annum, the people's court shall support it.

Legal basis: According to the provisions of the Reply on How to Confirm the Validity of Lending Behavior between Citizens and Enterprises, under a certain scope and under the circumstances of emotional disturbance, as long as the borrower and the borrower express their true intentions, the enterprise can borrow from individuals, and it is a private lending behavior. However, in the process of borrowing, if one of the following circumstances occurs, it is considered to be an invalid loan

1. The enterprise illegally raises funds from employees in the name of loans;

2. Enterprises illegally raise funds from the public in the name of loans;

3. The enterprise issues loans to the public in the name of loans;

4. There are other violations of laws and administrative regulations.