Clarification of sec 185 of companies act 2013
This query is : Resolved
18 September 2014
pls explain me the diff of sec 295 and sec 185 of co act 2013 loan to directors
CS Mitesh Mehta
(Expert)
18 September 2014
Section 185 of the Companies Act, 2013 is applicable both to private and public companies. This section in general prohibits a company to grant loans or advances or provide guarantees and securities, in any manner, to its directors or other entities in which directors are interested subject to few exceptions discussed below.
Section 295 of the Companies Act, 1956 contained similar provisions, but with two important differences. One, the Section was not applicable to Private Companies. This meant that Private Company was not governed by the restrictions imposed by Section 295 and was free to grant loans to its directors. Secondly, even in case of public companies, these transactions could be undertaken with the approval of Central Government. But now the situation has changed completely.
Section 295 of the Companies Act, 1956 contained similar provisions, but with two important differences. One, the Section was not applicable to Private Companies. This meant that Private Company was not governed by the restrictions imposed by Section 295 and was free to grant loans to its directors. Secondly, even in case of public companies, these transactions could be undertaken with the approval of Central Government. But now the situation has changed completely.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Accounting treatment of AMC alongwith the purchase of Laptop
- Nursery business
- Condonation Request sec 119(2) b -Enhancement Limit of Leave Exemption prior to AY 2023
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Issuing of delivery challan by seller of goods
- Tax on Amount transferred in HUF Account
- WRONG GSTR7 ENTRIES ACCEPTED ERRONEOUSLY
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
