Section 185 violation?

CA ANU RAO (CA IN PRACTISE) (128 Points)

11 April 2018

Can a subsidiary Company advance loan to its Holding Company where there are common directors. Is it violation of section 185 of Companies Act,2013??

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4 Replies

divya (Miss ) (118 Points)
Replied 11 April 2018

yes it is violation of section as this is covered in "a co in which director is interested"

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darshan (ca) (22 Points)
Replied 11 April 2018

No it's not violation if it's in ordinary course of business

Chetna Chhipa (0 Points)
Replied 12 April 2018

if holding company give loan/guarantee/security to its wholly owned subsidiary company then sec 185; is not applicable

Chetna Chhipa (0 Points)
Replied 12 April 2018

so in this it was violation of sec 185 of the companies act 2013

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