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Section 185 and its implications

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(Querist)
25 November 2013 Dear all,

As per the section 185 of the companies act, the companies cannot give corporate guarantee for loans taken by other companies as well for its Directors.

Then what will be the position of the existing loans sanctioned and the mitigations for the proposals already submitted to banks offering corporate guarantee.

What is the possible solutions and implications of the above section
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Ajay Mishra

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Ajay Mishra (Expert)
25 November 2013 Section 185 will not appliable as on date. The MCA has issued circular no.18 dated 19.11.2013 by which section 372A will be operational.
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CA Shruti kuchhal

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CA Shruti kuchhal (Querist)
25 November 2013 Ok Thanx sir for the early reply.
But i want to know its effect on the guarantees given by the companies for the existing loans after the notification of applicability.
What can be done in future as banks asks for corporate guarantees in almost every case.
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