Loans To Directors Proposed Amendment In The Definition In Section 185
Loans to Directors In order to set right the deficiencies and problem areas noticed in the Companies Act 2013 during its operation since August 2013, the Government came out with the Companies Amendment Bill, 2016. This Bill which proposes several amendments to the principal Act is yet to be passed. One important proposal relates to loans to directors. This brief discussion throws more light on this proposal. Nonetheless, upon notification of the Companies (Meetings of Board and its Powers) Rules, 2014, the companies got some relief as under: (i) loan advanced by a holding company to its wholly owned subsidiary (WOS) or any guarantee given or security provided by a holding company in respect of any loan made to its WOS; and (ii) guarantee given or security provided by a holding company in respect of loan made by any bank or financial institution to its subsidiary company were exempted from the requirements of section 185 of the Act....