Sunday 9 November 2014

A bird’s view on the applicability of section 186 of Companies Act, 2013


Section 186 provides provisions for Loan and investment by company, which is applicable from 1.4.2014. Transactions entered into up to 31.3.2014 will be covered by erstwhile corresponding Section 372A of Companies.

Section 186 covers 3 types of specified transactions entered into by a company directly or indirectly:


  • Loans to any person or other body corporate;
  • Guarantee or security given in connection with a loan to any other body corporate or person; and
  • Acquisition by way of subscription, purchase or otherwise, the securities of any other body corporate.