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guarantee sec 185

sanjivani (ichalkaranji) (146 Points)

01 November 2018

❓❓❓❓❓Can a Private limited company give guarantee to bank for loan to be taken by a partnership firm in which directors of pvt. Ltd. Company are partners...

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3 Replies

Vibha Trivedi (437 Points)
Replied 01 November 2018

Yes, guarantee can be given if following three conditions are satisfied by private company:
1. No body corporate as member of private company
2. Borrowing not exceeding twice its paid up capital or fifty crore rupees whichever is lower
3. No default in repaymeny of such borrowings

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santhisundaramg (articledassistant) (434 Points)
Replied 01 November 2018

no cannot be given

Vibha Trivedi (437 Points)
Replied 01 November 2018

Notification dated 5th June, 2015 has provided exemption to private companies from compliance of Section 185 of the CA,2013 if it fulfills three conditions as I mentioned in my earlier reply.

Post introduction of Companies(Amendment)Act, 2017, when Section 185 has been completely subdtituted, still Exemption Notification dated 5th June, 2015 is applicable.