Section 186
Cutiepie..:))) (Executive) (89 Points)
10 March 2015Cutiepie..:))) (Executive) (89 Points)
10 March 2015
Arpit Shah
(Accountant)
(21438 Points)
Replied 10 March 2015
Sec 186: Loans and investments by company
1) The company shall make investment through not more than 2 layers of investment companies.
2) The provision of subsection shall not be applicable in the following cases a) Indian Company from Foreign company , if such other company has investment subsidiaries beyond 2 layers as per the law of that country b) A subsidiary company from having any investment subsidiary for the purposes of meeting the requirement under any law or under rule or regulation framed under any law in force
3) No company shall directly or indirectly a) give any loan to any person or other body corporate; b) give any guarantee or provide security in connection with a loan to any other body corporate or person; and c) acquire by way of subscripttion, purchase or otherwise, the securities of any other body corporate,
and such loan shall not exceed 60% of paid up (share capital + free reserves + securities premium) or 100%( free reserves+ securities premium) ; whichever is more.
4) Where the company exceeds the above mentioned limits, prior approval by way of special resolution passed at the general meeting.
5) The company shall disclose to the members in the financial statement i) statement of particulars of loan ii) investment made or guarantee given iii) security provided iv) the purpose of loan or guarantee or security
6) No investment shall be made or loan or guarantee or security given by the company, unless the resolution is passed at the meeting of the Board with the consent of all director present and the prior approval of public financial institution However the public financial institution shall not be required a) where the aggregate of loans and investment made + loans and investment to be made < the limits specified in the section b) No default in the repayment of such loans or payment of interest as per terms of Public Financial Institution.
7) No company which is registered under 12 of SEBI , shall take interoperate loan or deposits > the prescribed limits and such company shall furnish in its financial statement the details of loan/deposit
8) NO loan shall be given at a rate of interest lower than the prevailing 1 year, 3 year, 5 year or 10 year Government security,
9) No company which is in default in the repayment of deposit before or after commencement of this Act, in payment of interest thereon, shall give any loan or give any guarantee or provide any security or make an acquisition till such default is subsisting.
10) The register kept in the registered office of the company a) shall be open for the inspection at the office b) extracts may be taken by the member or copies may be furnished to any member of the company on payment of such fees as may be prescribed
11) The section of intercorpoarate investment will not apply to the following: a) Banking company/Insurance company b) Housing finance company c) company in its ordinary course of the business d) company engaged in business of financing companies or providing e) infrastructural facilities f) to any acquisition, made by non-banking company registered under Chapter III B of the RBI, and whose principal is acquisition of shares.
12) The Central Government, make rules for the purpose of this section.
13) If company contravenes the provision of section
Fine Imprisonment Minimum Rs 25000 OR 2 years OR Both Maximum Rs 5 lakh
Analysis of 20 GST Notices (including 2 Appeals) and Practise on Drafting(with recording)
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)