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Loan by Companies

Abhishek Selvam O (374 Points)

18 April 2020

What is the difference between section 185&186 of companies Act 2013?is 185 loan to directors&186 loan to Third parties

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Vaanie Dangi (unemployed) (62 Points)
Replied 19 April 2020

Sec 185 is loan to director where it is mention no company shall give loan to director or whom the director is interested. But there are some exceptions.
and sec 186 is loan and investment by companies where a company shall not make investment through 2layers of investment companies. Investment company means any company whose principle business is acquisition of share debenture or securities.

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Abhishek Selvam O (374 Points)
Replied 19 April 2020

In section 186 does it mention about loan to other than directors right?

Vaanie Dangi (unemployed) (62 Points)
Replied 19 April 2020

186(2) No company can give directly or indirectly give any loan, guarantee or security to a person or other body corporate or make any investment in the securities of any other body corporate exceeding the limit mention.
so yes it mention loan other then director right.