Latest Clarification w.r.t. Section 185 of the Companies Act, 2013 on holding - subsidiary companies.
Dear All,
Today, Ministry of Corporate Affairs has issued a General Circular clarifying the applicability of Section 185 of the Companies Act, 2013 on holding - subsidiary companies. MCA has clarified that exemption as provided in Section 372A(8)(d) of the Companies Act, 1956 shall be applicable in respect of guarantee given or security provided by a Holding Company for loans made by a bank or financial institution to its Subsidiary Company and this exemption will be available till Section 186 of the CA, 2013 is notified.
Further, the above exemption will be applicable to cases where loans so obtained are exclusively utilized by the subsidiary for its principal business activities.
Please find attached herewith relevant MCA Notification. You may also download the same from the Link as mentioned below:
https://www.mca.gov.in/Ministry/pdf/General_Circular_3_2014.pdf
Regards
CS Ankur Garg
CAclubindia
