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There are two Companies, Company A and Company B and both Companies have three Directors. There are two common directors. Can Company A give any loan to Company B.

Fund raising

Posted By: Ravinder 9 year(s) ago

This question has been closed if you want to answer,you have to re-open.


    Subhash Bhaskar

As per section 185 of the Companies Act, 2013, a company cannot provide any loan to its directors or to any other person in whom the director is interested. As per the explanation provided to the term "to any other person in whom the director is interested " a private company having common directors shall be regarded as a person in whom the director is interested.But this is applicable only for private companies not for public companies. However as per MCA notification dated 05/06/2015 private companies are exempt from some of the provisions of Companies Act, 2013, among them sec.185 is one. As per that notification a private company can give loans to directors subject to certain conditions. kindly refer the notification.

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    s.m.a.millath

Please refer section 185/186/188 of companies Act 2013 and related Rules.

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Expert    Ankit Singhi

whats is the nature of both the companies

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