Sec 185
This query is : Resolved
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.
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
(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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