[Entire discussion is in relation to the companies which are associate companies and not holding-subsidiary companies]

As per Section 185, the company cannot give guarantee or provide any security in connection with a loan to any other body corporate. However, Section 185 allows corporate guarantee if these companies are holding-subsidiary company.

Section 185 provides that “Save as otherwise provided in this Act, no company shall, directly or indirectly, advance any loan, including any loan represented by a book debt, to any of its directors or to any other person in whom the director is interested or give any guarantee or provide any security in connection with any loan taken by him or such other person”. Section 185 provides exemption to holding company for giving loan or guarantee to its subsidiary companies.

Now i draw reference to Section 186, which reads as follow:

Section 186 (2):

No company shall directly or indirectly —
a) give any loan to any person or other body corporate;
b) give any guarantee or provide security in connection with a loan to any other body corporate or person; and
c) acquire by way of subscription, purchase or otherwise, the securities of any other body corporate, exceeding sixty per cent of its paid-up share capital, free reserves and securities premium account or one hundred per cent of its free reserves and securities premium account, whichever is more.

Section 186 (5):

No investment shall be made or loan or guarantee or security given by the company unless the resolution sanctioning it is passed at a meeting of the Board with the consent of all the directors present at the meeting and the prior approval of the public financial institution concerned where any term loan is subsisting, is obtained:

Provided that prior approval of a public financial institution shall not be required where the aggregate of the loans and investments so far made, the amount for which guarantee or security so far provided to or in all other bodies corporate, along with the investments, loans, guarantee or security proposed to be made or given does not exceed the limit as specified in sub-section (2), and there is no default in repayment of loan instalments or payment of interest thereon as per the terms and conditions of such loan to the public financial institution.

Hence, as per my opinion, reading of the Section 185 and 186 together provides as follow:

1. General Permission: Though giving of loans / guarantee is not possible as per Section 185, it is possible upto 60% of the networth of the company giving loan / guarantee.

2. Specific Permission: Giving loan / guarantee in excess of 60% is also possible, if board resolution is passed at a meeting of the Board with the consent of all the directors present at the meeting and the prior approval of the public financial institution is obtained.


Is my interpretation correct? Kindly advise me.

Dear Professionals, I just to know about an LLP. It registered in 2011, but till date haven't filed Form 8&11 for any of the financial years. now the additional fees is coming of near about 4.5 L. Partners never made any transaction in this llp. They want to wind up it. What could be the procedure and probability that they can safeguard themselves from this heavy additional fee. Best Regards

Whether a decree holder can execute a decree against Dormant Company?

A private limited company with 1 lacs paid up capital wants to take loan from director to meet its short term financial requirements. The amount required as loan is more than paid up capital and free reserves of the company so a special resolution needs to be passed.

My query is - whether we need to mention the amount of loan required to be taken from director in the special resolution or we may pass a general special resolution to authorize the company to take loan from directors to meet short term financial requirements.

if i am going to incorporate a new company i have my DIN and DSC which form am I suppose to fillup for icorporating a new company.
please answer my query



thanks

HELLO,
My client company has failed to appoint the first auditor within 30 days of incorporation.
Now, the appointment of first auditor by the members at EGM requires special or ordinary resolution?
Does it attract filing of MGT-14?

Sir Plz let me know the complete procedure related to following query:

An auditor who has filed form 23b for FY 2013-14 during 2012-13 agm has resigned w.e.f 31.07.2014 before agm for the year 2014 denying for signing Balance Sheet for FY 2013-14 due to his preoccupation in other assignments and a new auditor is to be appointed in his place for signing bs and statutory audit. Whether Adt-1 is to be filed for his apptt. or form 23b for FY 2013-14 and provide guidance regarding all other roc compliances and e-forms as on date. Its urgent sir. Plz help.

Thanks in advance sir.
Jaggi

Dear Friends

Pl let me know about the latest clarification and changes in refund / allotment of Share application and loans from director and members in a Pvt. Ltds. company.

Thanks

whether a pvt. ltd. company take unsecured loans from:
1. Directors
2. Shareholders/Members
3. Directors' relatives

Thank You.

dear sir,

how to calculate depreciation if the under WDV Method if asset is purchased after 01.04.14 for e.g. 29/08/14 the following treatment is correct or not??

mobile purchased on 12.01.15, therefore no. of days upto 31.03.15 is 79 & life of an asset as per companies act 2013 is 5 years so total life in days = 5years * 12 months * 365 days=21900

depreciation per day = cost of an asset i.e.17900/21900=0.82 per day * 79 days = Rs. 65

company is following WDV method