185 & 186 restriction on closing blance/transaction wise

Obviously, it is big non-compliance for a company who is giving loan to Directors or its related parties.

However, from 05th June, 2015, Section 185 is exempted to Private Limited Compaines if few conditions are fulfiled. Kindly refer the notification dated 05th June, 2015. Even though they settles their loan positions before year hand, it was clear non-compliance if private company has given loan to Director or its related parties before 05th June, 2015.

In our company Body coporates are invested.

So closing or settling transaction at evey end will ensure proper compliance or not.

(In cases where such loans are restricted under 185),Can company give loans & settling on year end will ensure proper compliance.

If your case is not coming under exemption, and if such company has given loan to director/related parties, then it is pure non-compliance because Section 185 is restrictive section which is asking a company not to do something. Even, settling loan positions will not make it good. It will remain non-compliance.

However, if company has already given loans to directors/related parties (if not exempted), then it is better to repay such loans and ensure not to do it again. Else, Company will be in trouble, if caught.