10 June 2014
Proplem:
ABC Ltd wants to transact with XYZ Ltd for a sum of Rs.15,00,000 and XYZ Ltd wants to transact with PQR Ltd. for a sum of Rs.15,00,000. Where as one Director of XYZ Ltd. is aslo a director in PQR Ltd. (i.e., Cover u/s 185 and 186).
Now question is that : there is any voilation of law or panelty attraction and is there any disclosure requirement for ABC Ltd and PQR Ltd.
10 June 2014
186 apply on company which give loan so will not attract on pqr limited. for ABC if its exceed limit given in 186 require BR or SR as per condition. For XYZ also check Limit of 186 if attract then BR or SR as per condition.
185 is regarding loan to director. so there is no relation (which mention in 185) between ABC & XYZ so no penalty and violation of law.
But B/W XYZ & PQR there are u said relation which mention under 185. so if 185 attract u cant give loan to director or person interested in director. so if company entered in transaction so penalty will levy on company as per section 185.
I write articles on 185 & 186 give me ur email id i will mail you
CAclubindia
