Section 186 Loan and Investment by Company: A Comprehensive Guide to Compliances
Section 186 Loan and Investment by Company: A Comprehensive Guide to Compliances Companies frequently engage in loan transactions and investments to finance their operations and grow their business. However, these transactions need to comply with legal requirements to prevent fraud and protect stakeholders' interests. The Companies Act, 2013, provides regulations for loans and investments made by companies, including the maximum limit, conditions for exemptions, and compliances to be followed. In this article, we will discuss Section 186 of the Companies Act, 2013, and the checklist for its compliances. Section 186 of the Companies Act, 2013, restricts companies from directly or indirectly giving loans, guarantees, or securities to any person or body corporate exceeding 60% of its paid-up share capital, free reserves, and securities premium account, or 100% of its free reserves and securities premium account, whichever is more. The word "person" above does not include a...