Company act 2013

Hi raghav,

There is a prohbition to pay interest out of capital, however there is an exception to this rulle which is specified in sec 208 whic state that

Where any shares in a company are issued for the purpose of raising money to defray the expenses of the construction of any work or building, or the provision of any plant, which cannot be made profitable for a lengthy period, the company may pay interest out of capital and other conditions as specified in this section to be followed