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185 exemption on loan given to whole time managing director

Jyothis (Article) (1127 Points)

16 April 2016

Can a whole time director of company take loan from company with out limit of 185 & interest free,

If a company policy/Spl resolution allowes directors to withdraw funds for personal use.

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5 Replies

Jatin Bajaj (CS) (2928 Points)
Replied 18 April 2016

YES, AS PER SECTION 185(1), FIRST PROVISO, COMPANY CAN PROVIDE LOAN TO ITS MANAGING DIRECTOR AND A WHOLE TIME DIRECTOR BY PASSING SPECIAL RESOLUTION IN A GENERAL MEETING TOGETHER WITH APPROVAL OF SHAREHOLDERS,

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CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 18 April 2016

Originally posted by : Jatin Bajaj
	YES, AS PER SECTION 185(1), FIRST PROVISO, COMPANY CAN PROVIDE LOAN TO ITS MANAGING DIRECTOR AND A WHOLE TIME DIRECTOR BY PASSING SPECIAL RESOLUTION IN A GENERAL MEETING TOGETHER WITH APPROVAL OF SHAREHOLDERS,

1 Like

Jyothis (Article) (1127 Points)
Replied 18 April 2016

Can such amount be given to a whole time director for his personal use.

Jatin Bajaj (CS) (2928 Points)
Replied 19 April 2016

Yes, such amount can be given to a whole time Director depending upon the internal policy of the Company. But before providing such a amount to whole Time Director, Company needs to pass special resolution in a general meeting together with the aprooval of Shareholder.

1 Like

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 19 April 2016

Originally posted by : Jatin Bajaj
	Yes, such amount can be given to a whole time Director depending upon the internal policy of the Company. But before providing such a amount to whole Time Director, Company needs to pass special resolution in a general meeting together with the aprooval of Shareholder.