Company giving loan to its shareholder

This query is : Resolved

Share Report Follow Query Ask a Query

arun

arun (Querist)
Follow

23 November 2018 Is there any restriction or Prohibition in a private limited company giving loans to its shareholder

Message likes : 1 times

RAJA P M

RAJA P M (Expert)
Follow

23 November 2018 Yes... Restricted u/s 185 with 186 of CA. Read with both sections.

Message likes : 2 times

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

24 November 2018 Restrictions are :-

(a) In its capital no other body corporate has invested any money,
i.e., its shareholder does not include any body corporate;

(b) If the borrowings of the lending company from banks or financial institutions
or any body corporate more than or equal to twice its paid up capital or
Rs. 50 crores, whichever is lower; and

(c) Such a company is not in default in repayment of such borrowings subsisting
at the time of making transactions under this section

Message likes : 1 times

arun

arun (Querist)
Follow

24 November 2018 thank you Sir @RAJA P M

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now