Jyothis (Article) (1127 Points)
10 May 2016Can a P.Ltd Co give loan to its WT/Managing Director.
Bt such WTD/MD is also the Director of its Holding Co.
In Both Company such directors are common & in Both Coies Body Corporate s have Invested..
For instance
Small Ltd 100% subsidiary of Big Ltd,Both have common Directors A & B.
Can Small Ltd give Loan to its Director A & B, will it attract provisions of Sec.185 .
Manisha Saboo
(m)
(78 Points)
Replied 10 May 2016
Proviso of Section 185 states:
Provided that nothing contained in this sub-section shall apply to—
(a) the giving of any loan to a managing or whole-time director—
(i) as a part of the conditions of service extended by the company to all its employees;
Therefore, if it is as per the terms of the service agreement, then Section 185 is not attracted.
Jatin Bajaj
(CS)
(2928 Points)
Replied 11 May 2016
Company can give loan to its Managing Director and whole Time Director by passing resolution.
So provisions of Section 185 is not attracted which prohibits the Loan to Director.
Jyothis
(Article)
(1127 Points)
Replied 12 May 2016
1. So 185 won't be attracted if Loan is given to Director of Holding Company,if such director is also the Managing/Whole time Director of Lending Company.
2.What are the practical steps involved in giving a Loan to a Director On a special resolution/As per company policy.
Is there any requirement of Roc filing/Entry in Register under Co Act 2013.
3.Can loan be given for personalneeds of Director.
4.Is it necessary to charge interest on loan given to Directors.
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