Can a limited Company give loan to its members??
if possible what are the condition to be satisfied??
Yes ! An Unlisted Public Limited co. can give loans to its members under section 186, provided:
- Co had not defaulted in repayment of existing loans.
- Boards approval(if within 60% of paid up capital+Free Reserves+ Sec Premium OR 100% of Free Reserves + Sec Premium a/c WHICH EVER IS MORE.
- Co. to disclose full particulars of loan given in financials.
- Rate of Interest shall not be less than existing Govt Bond rates.
-Co to maintain register containing particulars of loan given.
hope I have addressed your question.
Regards
CAclubindia
