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of <h1>Section 185 of Companies Act: Restrictions on Loans to Directors, Exceptions with Special Resolution, Penalties for Violations</h1> Section 185 of the Companies (Amendment) Act, 2017 prohibits companies from directly or indirectly advancing loans, guarantees, or securities to directors, their relatives, or firms where directors are partners. Exceptions allow such financial assistance if a special resolution is passed and the loans are used for principal business activities. Exemptions include loans to managing directors under service conditions, loans by holding companies to wholly-owned subsidiaries, and loans by companies in the ordinary course of business with appropriate interest rates. Violations result in fines and potential imprisonment for the company and responsible officers.
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