Loans to directors restricted: special-resolution approval and specified exemptions required, with criminal and monetary sanctions for contravention. Section 185 is replaced to prohibit companies from advancing loans, giving guarantees, or providing securities to directors, relatives, firms of directors, or persons in whom a director is interested, except where a special resolution is passed with full disclosure and the loans are used for the borrowing company's principal business; the provision defines related persons and lists exemptions including service conditions for managing directors, member approved schemes, ordinary course lenders at market rates, and holding company to wholly owned subsidiary financing; contraventions attract prescribed corporate and individual sanctions including imprisonment and fines.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Loans to directors restricted: special-resolution approval and specified exemptions required, with criminal and monetary sanctions for contravention.
Section 185 is replaced to prohibit companies from advancing loans, giving guarantees, or providing securities to directors, relatives, firms of directors, or persons in whom a director is interested, except where a special resolution is passed with full disclosure and the loans are used for the borrowing company's principal business; the provision defines related persons and lists exemptions including service conditions for managing directors, member approved schemes, ordinary course lenders at market rates, and holding company to wholly owned subsidiary financing; contraventions attract prescribed corporate and individual sanctions including imprisonment and fines.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
Join Channel
TaxTMI 
