Apllicability of sec. 185 of companies act,2013.

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Sujeet Italiya (Querist)
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03 May 2014 I want to know that in which FY Sec 185 of Companies Act,2013 is applicable. Because in my company Directors loan and interCompany loan has been stand in F.Y. 2013-14 which is prohibited in Sec 185. so what is a solution for that.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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03 May 2014 section 185 applies wef from 12 September 2013. no new transaction barred by 185 should be effected after this date and transactions entered into earlier should not be renewed.

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Sujeet Italiya

Sujeet Italiya (Querist)
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03 May 2014 Sir a inter group company loan is also there so it also cause a problem or not????Because a clarification is not there. Sec 372 of the companies act,1956 allowed for inter company loan but it is prohibited in sec. 185 of companies act,2013. So plz tell me whether inter group company loan which is occured after 12.09.2013 is allowed for fy 13-14 or not???

Nikhil Kaushik

Nikhil Kaushik (Expert)
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03 May 2014 if it has occurred after 12 september 2013, then it is not allowed.

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