Section 185

Hi Mayank,

The company can give loan to the trust even though there is same managerial person.

Sec 186 does not state that loan/guarantee cannot be given to related pary only the condition is that the loan should be given within the specified limits of the section.

Dear Saurabh Sir,

Thank u  sir for your gentle Reply,

further, according to your reply, so there is no need to comply the section 185? it means we do no need to follow the provision of Section 185 and make the transation independently according to the section 186.

Yes sec 185 would apply but its is exempted if the condition is followed as under ;

 "a company which in the ordinary course of its business provides loans or

gives guarantees or securities for the due repayment of any loan and in respect of such

loans an interest is charged at a rate not less than the bank rate declared by the

Reserve Bank of India."

So if the above condoition is complied no problem, else you cannot give the loan.