As per serction 185 no loan should be granted to Directors and Companies in which Director is Interested. The section applies with effect fro m 01.04.2014.
Now the question is that the loan is being carried forward from previous years i.e before 01.04.2014, then will Section 185 be applicable on it????
Have to wait for such clarification from MCA.....
No, it will not apply to existing loans as on 31.3.2014 provided these loans are in compliance with Companies Act 1956. However, if you give further amount in the account, CA 2013 will apply.
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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