Clarification on sec. 185 of teh companies act, 2013

Dear All,

Before the commencement of the Companies Act, 2013, a Private Company has taken a loan from a Bank and a Public Company had given corporate gurantee in connection with the said loan. At the time of providing the gurantee none of teh directors of both the Company were Common but presently one of the director is common in both the Companies. Since the transaction was before the commencement of Companies Act, 2013, kindly let me know the fate of the aforesaid transaction n lieu of the Section 185 of teh Companies Act, 2013.

Is the Company has contravened the provisions of Sec. 185 of the Companies Act, 2013???

 

 

Replies (3)

NO , Transaction entered before the applicability is not a contravention of sec 185.

What if the revival letter for revival of said loan is signed on current date by both the Companies. Will it be trated as modification of terms & conditions of the existing arrangement?????? 

And will be traeted as transaction in contravention of Sec. 185?????

Not sure but 

No contravention If such modification of terms not resulting into extra flow of funds ,

Only terms and conditions regarding period and mode of payment etc ..need not be in contravention.

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