Company Law - As you all know that inter corporate loans and investments play a vital role in flow of funds to group companies which face financial crisis. As per Section 186(1) of Companies Act 2013 a company can make investment through not more than 2 layers of investment companies but having certain exceptions. This provision is not […]...
Read MoreCompany Law - Loans, Investment, Guarantee or Security by Company: FAQs based analysis of the Section 185 and Section 186 of Companies Act, 2013 The article explains the Section 185 and 186 of Companies Act, 2013 in the form of Q&A with practical approach. “Section 185: “Loan to directors, etc.— (1) Save as otherwise provided in this Act, [&h...
Read MoreCompany Law - A Company can give loans and guarantees, acquire securities or make investments in another company or body corporate with the consent of the board or shareholders. Such loans given by a company to other companies or body corporates are known as inter-corporate loans. When a company invests in another company, it is known as inter-corporat...
Read MoreCompany Law - Section 186 of Companies Act, 2013 Loans, Investment, Guarantee and Security A Company can: 1. Give loan to any person or body corporate 2. Give guarantee or provide security for any loan taken to any body corporate 3. Make investment in any body corporate Approving Authority 1. Board of Directors– Any of the above mentioned [&helli...
Read MoreCompany Law - LOAN AND INVESTMENT MADE BY COMPANY as per section-186(1)- A company shall not make investment through more than two layer of investment company....
Read MoreCompany Law - Loan and investment by company- Section 186 186. (1) Without prejudice to the provisions contained in this Act, a company shall unless otherwise prescribed, make investment through not more than two layers of investment companies: Provided that the provisions of this sub-section shall not affect,— (i) a company from acquiring any ...
Read MoreGeneral Circular No. 06/2015 - (09/04/2015) - In cases where the effective yield (effective rate of return) on tax free bonds is greater than the prevailing yield of one year, three year, five year or ten year Government Security closest to the tenor of the loan, there is no violation of sub-section (7) of section 186 of the Companies Act,2013...
Read MoreGeneral Circular No. 04/2015 - (10/03/2015) - The issue has been examined and it is hereby clarified that loans and/or advances made by the companies to their employees, other than the managing or whole time directors (which is governed by section 185) are not governed by the requirements of section 186 of the Companies Act, 2013. This clarific...
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