Can the Company give Loans to Directors and Relatives?
Section 185 of the Companies Act, 2013 contains prohibition, restriction and exemption for providing Loan, Guarantee, and Security to the Directors of the Company and any of their relatives. The provisions of Section 185 are divided into four (4) clauses which are as hereunder: Section 185(1): Prohibition on providing Loan, Guarantee or Security Any Company cannot provide, directly or indirectly, any loan, including any loan represented by a book debt to, or give any guarantee or provide any security in connection with any loan taken by, any of the following persons: Any Director of the Company; [...]