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Section 185 & 186

16 February 2023

is it required to file BR in mgt-14 if the loan given by private company to another private company is within the limits as per section 186.

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5 Replies

CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 17 February 2023

Https://cleartax.in/s/mgt-14-resolutions-agreements-filing

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Shefali Gupta (104 Points)
Replied 22 February 2023

Do we need to pass SR if one private company gives loan to other private company having common director under sec 185

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CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 07 March 2023

Https://cleartax.in/s/section-185-companies-act-2013-checklist

Shefali Gupta (104 Points)
Replied 11 March 2023

If we fulfill the below conditions then we can be exempted under section 185
*Notification dated 5th June, 2015

In case of private company - Section 185 shall not apply to a private company-

(a) in whose share capital no other body corporate has invested any money;

(b) Total Borrowing is less than twice of its paid up share capital or fifty crore rupees, whichever is lower.

(c) such a company has no default in repayment of such borrowings subsisting at the time of making transactions under this section.

Jatin Bajaj (CS) (2930 Points)
Replied 04 May 2023

If the Private Company is not falling within the exemption limit as per the notification dated 5th June 2015, the Private Company if giving loan to other private Company in which director is common by passing the special resolution in the general meeting but provided that the explanatory statement of the notice of the General Meeting shall fully disclose the loan given

The loan shall be utilized by the Company for the principle business activities.

Loan shall be given as per the following conditions prescribed under section 186 of the Companies Act 2013

, i.e. 60% of the paid up capital + Free Reserve + Security Premium or 100 percent of free reserve and securities premium, whichever is higher

No Loan shall be given at the rate lower than 1 year, 5 year, 10 year of the government security loan