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Sec 185

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25 April 2017 please share the details about exception to sec 185 in case of private limited company. when a pvt ltd company can give loan to its director or a person in which director is interested.
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CS Mitesh Mehta

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CS Mitesh Mehta (Expert)
26 April 2017 A Private Company which satisfies the following conditions w.e.f. 5th June 2015 would not invite restrictions contained in section 185:
(a) In its capital no other body corporate has invested any money, i.e., its shareholder doesnot include any body corporate;
(b) If the borrowings of the lending company from banks or financial institutions or anybody corporate is less than 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

In such a case the private company can give loan to anyone without any restriction of section 185
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