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of <h1>Key compliance rules u/s 186 on company loans, guarantees, securities, layered investments, exemptions and penalties explained</h1> Section 186 of the Companies Act, 2013 regulates loans, guarantees, securities, and investments by companies. It restricts investments through more than two layers of investment companies, subject to limited cross-border and subsidiary exceptions. Financial exposure to persons and bodies corporate cannot exceed specified percentages of paid-up share capital, free reserves, and securities premium without prior special resolution, with carve-outs for wholly owned subsidiaries and joint ventures. Board approval, prescribed interest rates, disclosures in financial statements, maintenance and inspection of registers, and in some cases approval from public financial institutions are mandated. Certain regulated financial and investment entities are exempt. Contraventions attract fines for the company and fines and possible imprisonment for defaulting officers.
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