Company Law : Dive into Section 186 of the Companies Act, 2013, exploring its impact on Non-Banking Financial Companies (NBFCs). Discover regula...
Company Law : Explore Section 186 of Companies Act, 2013, covering limits, exemptions, resolutions, disclosures and more regarding loans & inves...
Company Law : Explore the key aspects of inter-corporate loans and investments under the Companies Act 2013. Understand the limitations set by S...
Company Law : Explore FAQs on company loans, investments, guarantees, and security under Sections 185 and 186 of the Companies Act, 2013. Unders...
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Company Law : Loan and investment by company- Section 186 186. (1) Without prejudice to the provisions contained in this Act, a company shall un...
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Company Law : In cases where the effective yield (effective rate of return) on tax free bonds is greater than the prevailing yield of one year,...
Company Law : The issue has been examined and it is hereby clarified that loans and/or advances made by the companies to their employees, other ...
The Companies (Amendment) Bill, 2017 has proposed significant Amendments to Companies Act, 2013 which includes amendment to Section 185 and 186 of Companies Act, 2013 related to Loans to directors, etc. In this Article I have tried to analyse the proposed amendments to Section 185 and 186 of Companies Act, 2013.
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
No investment shall be made or loan or guarantee or security given by the Company unless resolution sanctioning it passed at the meeting of the Board with the consent of all the directors present at the meeting.
BACKGROUND: If Promoters are starting a business (Company) or trying to grow an existing business (Company), all certainly will need money. This money can come from various sources. Source of Funding: Roughly speaking, Investments break down into two different forms: Debt and Equity. Debt Funding: Debt means money borrowed from lenders by the company and it pay the interest on that investment. Companies are required to repay the money with interest over time.
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.
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 other company incorporated in […]
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 clarification will, however, be applicable if such loans/advances to employees are in accordance with the conditions of service applicable to employees and are also in accordance with the remuneration policy, in cases where such policy is required to be formulated.
Loan and Investment by Company Under section 186 of the Companies Act, 2013 – The Sub Section (1) of Section 186 is applicable on all Companies either private Companies or public Companies.
