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# 13.1.Loan to Directors under Companies Act

# 13.1.Loan to Directors under Companies Act


Topic to be discussed

In this session, CS Vinit Nagar will discuss the provisions related to the loan to directors under the Companies Act. Provision of the Companies Act which has been diverted from complete prohibition to now certain restrictions with new flexibility & exemptions to certain categories of companies.

Questions asked during the session.

1. What about Related party of director?
2. Can a private company provide loan to a public compnay in which there are common director?
3. Can company give loan to another company in which no directors are commom?
4. Can a company incorporated in India having a company abroad can give loan with same board of directors to any director ?
5. Banker has take over loan on Director Property and give loan to Company as wall director. and director loan amount show as advance to director, is it violation of section 185?
6. Can inter-corporate loan is allowed between two private company?
7. If loan given by acompany whose shareholders having stake more than 20% also having shareholding of loanee company by more than 20%, can a company give loan to B company?
8. What about Related party of director......can loan be given?
9. In case of inter corporate loan between two private company. Can it be interest free loan?
10. U/s 186 (2) is there any way to increase the limit?
11. If companies majority shareholders are directors then they can take loan easily and limit of 186(2) can be easily breaked?

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