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Company giving guarantee to Directors

30 December 2019

can Co. given corporate Guarantee to its 2 share holders who are also directors of the co. for there personal housing loan

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Chirag (Professional) (1979 Points)
Replied 10 January 2020

No, Section 185 specifically restrict company to give loan/guarantee or security in connection with loan taken by director[s] or any other entity in which director is interested, Subject to Loan may be granted TO MD/WTD ONLY as per term of their employment contract, which is at par with other employees of company ,or to subsidiary /associate or any other company in which director is interested, subject to passing of special resolution and such loan is used by that company for its Principal Business activity only...