Register of Loans explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The old register does not have to be rewritten. It just stops receiving new entries.
The position
Since, 1 April 2014 it is mandatory for a company to maintain the Register of Loans, Guarantee, Security and Acquisition made by the company in Form MBP-2. Also, as per the clarification issued by MCA vide Circular No. 15/2014, registers maintained by companies pursuant to Section 372A (5) of the CA, 1956 may continue as per the requirement under these provisions and the new format prescribed (MBP-2) shall be used for transactions entered on and from 1 April 2014.
When a statutory register changes format, there is an obvious question nobody enjoys answering: what happens to what is already in it?
Two possibilities. Recast every historical entry into the new form — accurate, complete, and enormously expensive for a company with decades of entries. Or draw a line at a date, leave the past as it stands, and apply the new format going forward.
Circular No. 15/2014 takes the second route. Registers under section 372A(5) of the CA, 1956 may continue as per the requirement under these provisions, and MBP-2 applies to transactions on and from 1 April 2014.
The reasoning is that a register records what actually happened, and a historical transaction does not change because a form did. Recasting the entries would produce the same facts under different column headings — new work, no new information, and a fresh opportunity to introduce transcription errors into a record that was correct.
The practical consequence is that a company incorporated before 2014 has two registers, and both are live records. The pre-2014 one is closed to new entries but remains the evidence of what was done under the old law; the post-2014 one runs forward. Inspecting the company's lending history means reading both.
The same technique appears repeatedly in the transition to the 2013 Act — the articles of an older company under section 5(9), the savings for 1956 notifications under section 465(2), the counting of pre-2013 auditor tenure under rule 6(3). Each preserves what was validly done and applies the new requirement from a date, rather than reaching backwards.
The two registers
| Transactions | Register | Source |
|---|---|---|
| Before 1 April 2014 | Register under the 1956 Act | Section 372A(5), CA 1956 |
| On and from 1 April 2014 | Form MBP-2 | Section 186 and the rules |
| Both | Retained; the earlier one is not recast | |
What the register of loans records
- Loans given by the company.
- Guarantees given.
- Security provided in connection with a loan.
- Acquisitions of securities of any other body corporate.
- The prescribed particulars for each — the party, the amount, the terms and the board authority.
Common mistakes
- Recasting pre-2014 entries into Form MBP-2 and discarding the earlier register of loans.
- Starting the MBP-2 register only when a first post-2014 transaction is noticed, rather than maintaining it continuously.
- Recording the amount without the board authority that permitted it.
- Treating the register as an accounting record rather than a statutory one open to inspection.