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loan by Pvt. Co.?

pooja (student) (46 Points)

02 May 2019

Can a pvt. co. give loan to another pvt. co. having one common director?

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3 Replies

thippesh (student) (25 Points)
Replied 02 May 2019

Yes, a private company can take loan from another private company and this transaction is excluded from the purview of Deposits. However, as per Section 185, a private company cannot given loan to a Private company in which its Director is interested.

pooja (student) (46 Points)
Replied 03 May 2019

then what is sub section 2 of 185 all about?

thippesh (student) (25 Points)
Replied 03 May 2019

Section 185(2) Company can give loan to persons in whom directors are interested after passing of Special Resolution however, still there is restriction on loan/ guarantee to directors or relative of Directors.