4. No Company (Public & Private)
Advance any loan
Provide any security in
connection with any loan
taken by him.
TO
Any of its directors
OR
any other person in whom director is
INTERESTED*
5.
6. Exemption
Loan to MD or WTD- as
a part of the conditions of
services extended by co.
To all its e,ee.
OR
pursuant to any scheme
approved by members by
a special resolution
A company its ordinary
course of its business
provides loans or gives
guarantee or securities for
the due repayment of any
loan
AND
Interest charged on such
loan not less than bank
rate declared by RBI
7. Company A has two Directors Mr. X and Mr. Y. Both holds 50% share
each of Company.
Company A wish to give loan to following and have asked for your
review on same
S. No. Loan to Allowed/no
1. Director X No
2. Director of Co. D which is the holding Co.
of A
No
3. A partner of Director of Holding Company Allowed
8. Rule 10 of the Companies (Meeting of Board and its Power) Rules 2014
Loan by holding company to
its subsidiary and guarantee
or security provided by
holding company in respect of
loan to its subsidiary will be
outside the ambit of section
185 of CA 2013
Provided these
comply with the
requirement of
section 186
9. As per section 186(2), No company shall directly or indirectly
give any loan to any person or other body corporate,
Give any guarantee or provide security in connection with a loan to any
other body corporate or person and
acquire by way of subscription, purchase or otherwise, the securities of
any other body corporate
EXCEEDING
WHICHEVER IS MORE
60% of its paid up capital plus free reserve plus
securities premium
OR
100% of its reserve plus securities premium account
10. Points to noted:
This section mandates a company to make investment only through
2 layers of investments Companies.
A company can give loan, guarantee or provide any security or
acquisition beyond the limit as prescribed BUT subject to prior
approval of members by passing SR.
In case company has already taken loan etc., from public financial
institution(PFI), then it is mandatory to take prior approval from such
PFI.
No company which is in default in the repayment of any deposit or
any interest thereon, shall give any loan etc., till such default is
subsisting.
11. Non Applicability of section 186:
any loan etc., provided by a banking company or an insurance
company or a housing company in the course of its business OR a
company engaged in the business of financing of companies or of
providing infrastructural facilities;
any acquisition:
made by a non-banking financial company registered under RBI act,
1934 and whose business is acquisition of securities.
Made by a company whose principal business is the acquisition of
securities;
12. For Company:
EVERY COMPANY which contravenes
the provision of this section shall be
liable to a penalty which shall not be
less than Rs.25,000 but which may
extend to Rs. 5 Lakhs.
For Officers:
Every officer of the company who is in
default shall be punishable with
imprisonment for a term which may
extend to 2 years and fine which shall
not be less than Rs. 25,000 but may
extend to Rs. 1 lakh.
PENALTY
14. Requirement:
As per section 203, EVERY
LISTED company and every
other public company
having a paid up share
capital of Rs. 10 crore or
more shall have whole
time KMP
MCA inserted new Rule 8A which says:
A company other than a company covered under rule 8 which has a paid
up share capital of five Crore rupees or more shall have a whole-time
company secretary.[Inserted on 9th June 2014]
15. According to section 203(3), a whole time Key managerial
Personnel shall not hold office in more than one company except in its
subsidiary company at the same time.
16. MAX/MIN PUBLIC
COMPANY
PRIVATE
COMAPNY
ONE
PERSON
COMAPNY
MIN 3 2 1
MAX 15 15 15
However, a company may appoint more than 15 directors after
passing a special resolution.
1. Women Director:
As per section 149, following class of company shall appoint at least one
woman director:
Every listed company;
Every other public company having-
Paid up share capital of Rs. 100 Crore or more; or
Turnover of Rs. 300 Crore or more
17. Resident Director:
Every company shall at least one director who has stayed in India for a
total period of not less than 180 days in the previous calendar year.
Independent Director:
Independent director means a director other than:
– MD
– WTD
– Nominee Director
18. Number of Independent Directors
Listed Company Unlisted Public Company
at least1/3 of
the total
number of
Directors
At least 2
director
Paid up
share capital
of Rs. 10 Cr.
Or more
Turnover
of Rs.
100 cr.
Or more
O/s loan+
deb.+
deposits
exceeds
Rs.50 Cr.
