Loan to director? please reply
Ankush (Student) (1369 Points)
20 March 2018
Can company give loan to its director? If yes, under what conditions?
3 Replies
Aditya Dude
(93 Points)
Replied 20 March 2018
Refer section 185
No company can directly indirectly give loan to director .
there are few exceptions.
No company can directly indirectly give loan to director .
there are few exceptions.
Jatin Bajaj
(CS)
(2930 Points)
Replied 21 March 2018
In general Company cannot give Loan to Directors as per provisions of the Companies Act 2013
As per Section 185, a Company cannot give loan to Directors or any other person in whom the directors are interested.
But Company can give loan to Whole time director or its managing director by passing special resolution in general meeting
A holding company can give loan to its wholly owned subsidiary company even if there are common directors.
A Private Company can give loan to its directors if following conditions are satisfied
No other body corporate has invested in that Company
Borrowing from bank or financial institution is less than twice its paid up share capital or 50 crore whichever is less
Company has not defaulted in repayment of the earlier laon
Hari chavan
(N.a)
(40 Points)
Replied 24 March 2018
Refere Section 185 read with Notification dated 5th June 2015 and then see section 186
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