Section 185 of companies act 2013

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Can any body explain the Exceptions to Section 185 of Companies Act, 2013?

Provided that nothing contained in this sub-section shall apply to—

(a) the giving of any loan to a managing or whole-time director—

(i) as a part of the conditions of service extended by the company to all its employees

Replies (4)

Dear Himanshu,

As per my Understanding,

Section 185 will not apply to a loan given to WTD /MD, if loan is extended to all employees of Company on similar conditions and is not specifically given to WTD/MD.

regards

BHAVIN N SHETH

Thanks for Your Reply!

But what does this sentence mean?

"as a part of the conditions of service extended by the company to all its employees"

Does it mean that the consideration to employees is in the form of loans? 

Yes Himanshu,

Conditions of services means terms and conditions on which loan is given to employees

thus terms and conditions should be same for all employees and WTD/MD

Then it is exempted from clause of section185

regards

 

Thank You Sir!!

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