section 185 of comoanies act 2013

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Chinmay Soni (Querist)
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27 September 2016 A company is falling under exception to section 185 of companies act 2013 but now after 2 months the company needs to violate the condition which is making its debt equity ratio more than 2:1. So is there any time limit for rectifying?

Pratik Shah

Pratik Shah (Expert)
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27 September 2016 Your query is not clear. Please elaborate.

Chinmay Soni

Chinmay Soni (Querist)
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27 September 2016 We have A private company.. Which is under exception of section 185 i.e. Fulfilling the three conditions of exception. Now the company wants to violate one of the condition. So is there any time limit for violation. Example u can not violate for 6 months once u are exempted. Or simply can u please explain me the provisions regarding exceptions to pvt companies under section 185 and its after effects

Pratik Shah

Pratik Shah (Expert)
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28 September 2016 What I understand from your query now is that, one of the three conditions will not be continued and hence Section 185 will be applicable to your company.
Once Company breaks any of the conditions and once the Section 185 is applicable to your Company, Company can no longer give loan to Directors and its related parties pursuant to Section 185.

I have never heard anything like 'time limit for violation of Section 185'. I guess, you have chose incorrect words to explain.

Chinmay Soni

Chinmay Soni (Querist)
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28 September 2016 Thanks.. My query is solved. Sorry was a bit confusing.. Thanks a lot

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