article on laon and invesement by companies

Posted on 31-03-2016        By ADMIN

article on laon and invesement by companies Loan and Investment by Company Under section 186 of the Companies Act, 2013 1- Notified Section This section is not covered under notification which was issued on 12th September, 2013, Hence this section is not applicable at the time of issue of this Article. 2- Applicability of Section A) The Sub Section (1) of Section 186 is applicable on all Companies either private Companies or public Companies. B) Considering the Sub Section (11) of Section 186 of the Act, whole section except sub section (1) shall be applicable on Private Company as well as Public company also. 3- Non Applicability of Section The Section 186 (Except Section (186 (1)) of the Companies Act, 2013 does not apply in following:- 1- Banking Company, Insurance Company, Housing Finance Company etc 2-Any company whose main business of acquisition of shares or securities etc The intention of sub section 11 is clear that if the companies are involved in the area of banking, insurance, funding, facilitating of loan etc, In that case, this section cannot be applicable. 4- Meaning of layers (d) “layer” in relation to a holding company means its subsidiary or subsidiaries; (Explanation (d) of Section 2 (87)) 5- Investment (u/s 186 (1)) It means a company may not make investment its money more than Two Layer. The limit has been fixed. It is showing a good sign for transparency. 6- Investment not affects (Proviso of section 186(1)) The provisions of Section 186 (1) shall not be make compulsion on following cases:-

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