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of <h1>Clause 186: Regulating Company Loans and Investments, Limiting Layers, and Requiring Disclosure and Board Approval for Exceeding Limits.</h1> Clause 186 of the Companies Bill, 2011, regulates loans and investments by companies. It limits investments to two layers of investment companies, with exceptions for foreign acquisitions and subsidiaries meeting legal requirements. Companies cannot exceed specified limits in loans, guarantees, or securities without special resolution approval. Financial statements must disclose loan details, and board consent is required for resolutions. Inter-corporate loans and deposits have prescribed limits, and loans must not be below the prevailing bank rate. Defaults prevent further loans or guarantees. A register of transactions must be maintained and accessible. Exemptions apply to certain financial and infrastructure companies. Violations incur fines and potential imprisonment for officers.
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