1. 1. Presentation by: Rohit Kumar CS, M.Com
2. 2. Companies Act 2013 Companies Act 1956 29 13 Chapters 7 15 Schedules 470 658 Sections
3. 3. No Company (Public & Private) Advance any loan Provide any security in connection with any loan taken by him. TO Any of its directors OR any other person in whom director is INTERESTED*
4. 4. Exemption Loan to MD or WTD- as a part of the conditions of services extended by co. To all its e,ee. OR pursuant to any scheme approved by members by a special resolution A company its ordinary course of its business provides loans or gives guarantee or securities for the due repayment of any loan AND Interest charged on such loan not less than bank rate declared by RBI
5. 5. Company A has two Directors Mr. X and Mr. Y. Both holds 50% share each of Company. Company A wish to give loan to following and have asked for your review on same S. No. Loan to Allowed/no 1. Director X No 2. Director of Co. D which is the holding Co. of A No 3. A partner of Director of Holding Company Allowed
6. 6. Rule 10 of the Companies (Meeting of Board and its Power) Rules 2014 Loan by holding company to its subsidiary and guarantee or security provided by holding company in respect of loan to its subsidiary will be outside the ambit of section 185 of CA 2013 Provided these comply with the requirement of section 186
7. 7. As per section 186(2), No company shall directly or indirectly give any loan to any person or other body corporate, Give any guarantee or provide security in connection with a loan to any other body corporate or person and acquire by way of subscription, purchase or otherwise, the securities of any other body corporate EXCEEDING WHICHEVER IS MORE 60% of its paid up capital plus free reserve plus securities premium OR 100% of its reserve plus securities premium account
8. 8. Points to noted: This section mandates a company to make investment only through 2 layers of investments Companies. A company can give loan, guarantee or provide any security or acquisition beyond the limit as prescribed BUT subject to prior approval of members by passing SR. In case company has already taken loan etc., from public financial institution(PFI), then it is mandatory to take prior approval from such PFI. No company which is in default in the repayment of any deposit or any interest thereon, shall give any loan etc., till such default is subsisting.
9. 9. Non Applicability of section 186: any loan etc., provided by a banking company or an insurance company or a housing company in the course of its business OR a company engaged in the business of financing of companies or of providing infrastructural facilities; any acquisition: made by a non-banking financial company registered under RBI act, 1934 and whose business is acquisition of securities. Made by a company whose principal business is the acquisition of securities;
10. 10. For Company: EVERY COMPANY which contravenes the provision of this section shall be liable to a penalty which shall not be less than Rs.25,000 but which may extend to Rs. 5 Lakhs. For Officers: Every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 2 years and fine which shall not be less than Rs. 25,000 but may extend to Rs. 1 lakh. PENALTY
11. 11. Section 203
12. 12. Requirement: As per section 203, EVERY LISTED company and every other public company having a paid up share capital of Rs. 10 crore or more shall have whole time KMP MCA inserted new Rule 8A which says: A company other than a company covered under rule 8 which has a paid up share capital of five Crore rupees or more shall have a whole-time company secretary.[Inserted on 9th June 2014]
13. 13. According to section 203(3), a whole time Key managerial Personnel shall not hold office in more than one company except in its subsidiary company at the same time.
14. 14. MAX/MIN PUBLIC COMPANY PRIVATE COMAPNY ONE PERSON COMAPNY MIN 3 2 1 MAX 15 15 15 However, a company may appoint more than 15 directors after passing a special resolution. 1. Women Director: As per section 149, following class of company shall appoint at least one woman director: Every listed company; Every other public company having- Paid up share capital of Rs. 100 Crore or more; or Turnover of Rs. 300 Crore or more
15. 15. Resident Director: Every company shall at least one director who has stayed in India for a total period of not less than 180 days in the previous calendar year. Independent Director: Independent director means a director other than: MD WTD Nominee Director
16. 16. Number of Independent Directors Listed Company Unlisted Public Company at least1/3 of the total number of Directors At least 2 director Paid up share capital of Rs. 10 Cr. Or more Turnover of Rs. 100 cr. Or more O/s loan+ deb.+ deposits exceeds Rs.50 Cr.
17. 17. A maximum limit is 20 companies including a sub limit of 10 public companies