Loan and Advance to company by other company

This discussion clarifies whether one company can provide loans or advances to another company, including associated or subsidiary entities, exceeding its share capital, free reserves, and security premium. The consensus is that a special resolution passed in an extraordinary general meeting (EGM) or annual general meeting (AGM) is typically required prior to granting such loans, as per Section 186 of the Companies Act. Exceptions exist for NBFCs/banks or loans to wholly-owned subsidiaries, but generally, member approval is essential.