Clarification on section 186 of ca, 2013

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Arun Vashisth

Company Secretary

27 Points Posted on 20 May 2014

as per section 186(2) of CA, 2013 the term include any person so does it means that the company required to take authorization even if it Give loan to its Director or Employees or Any other individual??????

and section 185 also covers Loan given to the Director of the company by the company so the company is required to comply with requirement of Section 186 in case of loan given to the Directors or the company is Required to comply only section 185 in such a case????

Replies (5)

P C Agrawal

Registered independent director Past Ch

5233 Points Posted on 20 May 2014

Pl refer my article on the same:

/articles/faqs-on-section-186-of-companies-act-2013-20499.asp#.U3sK8lKKDIU

Vandana J Doshi

Practising Company Secretary

8218 Points Posted on 21 May 2014

Hi,

loan to directors is completely restricted undet section 185....

loans to employees or any individual ( not related to directors as covered in sec 185) will be covered under section 186....

Arun Vashisth

Company Secretary

27 Points Posted on 21 May 2014

Originally posted by : Vandana J Doshi

Hi,

loan to directors is completely restricted undet section 185....

loans to employees or any individual ( not related to directors as covered in sec 185) will be covered under section 186....

there is no any restriction in section 186 that it will not applicable to the loan to Director as covered in section 185 of the CA, 2013.

in case of Loan to Directors Section 186 not applicable because of the Interpretation of First lineof the Both the Sections/

Vandana J Doshi

Practising Company Secretary

8218 Points Posted on 22 May 2014

Hi Arun,

I feel that their is a clash between the first two lines of section 185/186...but as per my understanding, sec 186 is a general provision and 185 is a specifc and stricter provision.....so as per rule, a stricter and specific provision will always overrule the general one.....however, this is my view....others views are welcome....

Regards

Arun Vashisth

Company Secretary

27 Points Posted on 04 June 2014

Originally posted by : Vandana J Doshi

Hi Arun,

I feel that their is a clash between the first two lines of section 185/186...but as per my understanding, sec 186 is a general provision and 185 is a specifc and stricter provision.....so as per rule, a stricter and specific provision will always overrule the general one.....however, this is my view....others views are welcome....

Hi Vandana

your view is right as i have also same view about it

thanks

Regards