(a) A special resolution is adopted by the Company at the General Meeting: When the Companies Act of 1956 was in force, public limited companies granted loans, guarantees and securities with the prior approval of the central government. The companies were used to borrow funds and pass them on to subsidiaries. However, in the event of a problem, the subsidiaries were left alone to remedy it. For the purposes of this Section, the term means “for any other person to whom the director is interested‖ – (a) any director of the lending company or of a company that is its holding company, or a partner or relative of such a director; (b) any partnership in which such a director or parent is associated; (c) any private corporation of which a director is a director or member; (d) a legal person attending a general meeting of at least twenty-five per cent. all voting rights; may be exercised or controlled by such a director; or by two or more of these directors together; or (e) any entity, board of directors, director or director accustomed to act in accordance with the instructions or instructions of the board of directors or one or more directors of the lending company. 2. Where a loan is advanced or if a guarantee or guarantee is given or provided in breach of the provisions of Subsection (1), the enterprise shall be punished by a fine of at least five lakh rupees, but up to twenty-five lakh rupees; (i) within the framework of the conditions of employment which the undertaking extends to all its employees; or Years. Yes, a limited liability company may grant a loan to a full-time director/director of the company if: section 185 of the 2013 Act imposes a complete prohibition on loans to directors and any person in whom; the Director is interested, with the exception of the two exceptions provided for in points (a) and (b) of the reservation in Article 185(1) of the 2013 Act. There is no approval from the central government for such loans, as they are prohibited. The penalty is provided for in Article 185(2) of the 2013 Law; which provides for a prison sentence of up to 6 months and a fine of up to one rupee of twenty-five lakhs. to a director, a director of his holding company, relatives, partners of a director or a corporation of which a director is a partner, or any other person interested in the director. Therefore, this section prohibits the granting of loans to parents or directors or partners of the directors of the Corporation.
Article 185(2) allows a company to grant loans to any person interested in one of the directors under certain conditions. However, there are some exceptions where shareholders who ultimately own the company can allow the use of company funds in a certain way in the interest of the company, and there are also exceptions for private companies in terms of facilitating business activity. (c) such an undertaking is not in arrears in the repayment of those obligations which existed at the time of the execution of the operations under this Section. The conditions to be fulfilled for the granting of loans or the granting of guarantees or guarantees to the person interested by the managing director are that a special resolution be taken at the general meeting and that the borrowing company uses the loans granted for its main activity. In the statement of reasons for the convening of the general meeting at which such a decision on the granting of the loan is taken, full details of the loans or guarantees granted or of the guarantee provided and the purpose for which the loan or guarantee or guarantee is to be used by the person receiving the loan should: be disclosed. Q2. What is the limit on making a loan to a director under the Companies Act, 2013? (1) No enterprise may, directly or indirectly, advance a loan, including a loan represented by an accounting debt, or provide a guarantee or guarantee in connection with a loan granted by,— in accordance with Rule 10 of the Rules of Procedure (Meetings of the Board of Directors and its Powers), 2014, s. Section 185 of the 2013 Act would not apply to (d) guarantees or guarantees provided by a holding company in respect of loans from a bank or financial institution to its subsidiary: (c) a loan granted by a holding company to its wholly-owned subsidiary, or a guarantee or security provided by a holding company in respect of a loan to its wholly-owned subsidiary; or To end this practice, section 185 of the Companies Act, 2013 came into force. This section contains exceptions to the limitation for the company when granting loans. A company may provide a guarantee or advance loans or guarantees to: general manager or manager who is accustomed to acting in accordance with the instructions of the directorDirectors of the credit company The law contains the list of persons who are considered to be persons in whom one of the directors of the company is interested. The company can advance the loans or give the guarantee or guarantee only to these people. You are – Before the Companies Act, 2013; The Companies Act 1956 was in force.
Under the previous law, state-owned enterprises could provide loans, guarantees and securities with the prior approval of the central government. Section 185 of the Companies Act, 2013 explains the provisions relating to loans or advances to directors or guarantees granted in connection with a loan contracted by the company or his relative, directly or indirectly, by the Corporation, as well as the penalties for violating the provisions of this division. The primary purpose of this section of the Companies Act is to ensure that directors who hold a fiduciary position in the Corporation with respect to shareholders cannot use the Corporation`s funds to their own advantage. However, it is also known that the shareholders are the final owner of the company, so they have the full right to authorize the use of the company`s funds in a certain way in the interest of the company. Let us discuss the provisions: Years. No company may grant, directly or indirectly, a loan to another company that exceeds 60% of its paid-up share capital, free reserves and premium. .
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