25 April 2017
According to section 185 of companies act 2013, generally companies are exempted from providing Loan to Directors but in case of the Private Limited Companies , if the conditions are satisfied, the Company can provide Loan to Directors. in whose share capital , no body Corporate has invested the money. For Example : ABC Private Limited companies have 5 shareholder and out of them one is public Company holding 15% of shares , then in that case Private Company cannot give Loan to Directors The borrowing from banks or financial institutions by the Company is less than twice the paid up share capital or 50 crore whichever is less Such a Company is not in default in repayment of borrowings subsisting at the time of making transactions under this section.
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