Loan granted by pvt ltd company to it's employee

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Querist : Anonymous

Querist : Anonymous (Querist)

27 January 2016 Dear Experts, A pvt. ltd. company has grant interest free loan to it's employee, plz let me know weather section 185 of company act. will attract in this case or not.... Thanx & Regard Anant Singh

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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27 January 2016 Exceptions to section 185: 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; or ii. pursuant to any scheme approved by the members by a special resolution;
or
b) 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.