Loans taken or given by companies

 A Private Company can give loans to its directors and assosiate Companies as provisions of Section 185 are not applicable to a Private Company under section 462 and vide exemption notification of MCA dated 5 June 2015 .

Loan to director are allowed for Private Limited Companies if its fulfill the below mentioned conditions:

1. Body Corporate should not be Shareholder

2. Not borrowed money from Bank/ Financial Institution/ Body Corporate exceeding lower of the following:-

i. Twice its Paid up capital

ii. Rs. 50 Crores

3. No repayment default subsisting of such borrowings at time of giving loan

Note:

Giving of loans/ guarantee/security to Group Companies now possible.

You will need to check Section 185 and Section 186 about its applicability. Please also check rules.