Sec 185

Co Act 2013 543 views 3 replies

CAN A PVT. CO. GIVE LOAN TO ITS DIRECTORS/RELATIVES ON INTEREST??

Replies (3)

Only if it is an NBFC and its ordinary business is to provide loans or guarantees or securities at an interest  not less than the RBI rate. Otherwise the same is strictly prohibited in the new Act.....

Section 185 specifically rohibits all the company to give any loan/ guarantee/ security to its directors or the persons in whom the director is interested.

 

Moreover, no company can give any loan to an indiviadual unless and untill it has obtained NBFC Certificate from RBI. Only if it is an NBFC and its ordinary business is to provide loans or guarantees or securities at an interest  not less than the RBI rate. Otherwise the same is strictly prohibited in the new Act....

However, a company can invest and provide loan under section 186 to the other corporate.

Originally posted by : MOHIT SALUJA
Section 185 specifically rohibits all the company to give any loan/ guarantee/ security to its directors or the persons in whom the director is interested.
Moreover, no company can give any loan to an indiviadual unless and untill it has obtained NBFC Certificate from RBI. Only if it is an NBFC and its ordinary business is to provide loans or guarantees or securities at an interest  not less than the RBI rate. Otherwise the same is strictly prohibited in the new Act....

However, a company can invest and provide loan under section 186 to the other corporate.

Mohit ji,

On the question "whether a corporate company can provide loans to other body corporate in which directors are interested?" the answer is no and every body is suggesting the same.

But I want to know that Sec. 295 & 372a are same to Sec. 185 & 186.

How in old act company provide loans to related company under 372a and escapes sec. 295?

Please reply


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 13 April 2026
GST CONSULTANCY

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 12 March 2026
Customer Relationship Executive

TAXLET

Calicut

B.Com

View Details
Company
Featured 14 March 2026
Article Trainee

N N V Satish&co

Hyderabad

CA Inter

View Details
Company
Featured 14 April 2026
GST CONSULTANT

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 28 March 2026
CA Final

Ashok Amol & Associates

New Delhi

CA Final

View Details
Company
Featured 19 March 2026
Article Assistant

Gupta Sachdeva & Co. Chartered Accountants

New Delhi

CA Final

View Details
Company
Featured 28 March 2026
Accountant

Ashok Amol & Associates

New Delhi

B.Com

View Details
Company
Featured 14 March 2026
Associate CA

N N V Satish&co

Hyderabad

CA

View Details