TaxTMI 
TaxTMI 
If company A is itself a partner in partnership firm B, does restriction of section 185 of the Companies Act apply to corporate guarantee given by company A to secure the loan sanctioned to partnership firm B by the bank ?
section 185 of companies act 2013
30 Jul 2014 
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Corporate guarantee restriction under section 185 does not bar a company guaranteeing its partnership's loan unless connected persons are partners.
A corporate guarantee by a company that is a partner in a firm is not automatically prohibited by the statutory restriction on loans and guarantees; the restriction applies if any partner in the firm is a director, manager, or relative of a director or manager of the company. (AI Summary)
A corporate guarantee by a company that is a partner in a firm is not automatically prohibited by the statutory restriction on loans and guarantees; the restriction applies if any partner in the firm is a director, manager, or relative of a director or manager of the company. (AI Summary)
