loan to partnership firm

[Girish S Marpalli]

Dear All

Can a private limited company give a loan or security to the partnership firm in which Directors are partners in the said firm u/s185 ? Is there any exemption for this section to pvt ltd?

with regards

CS Girish Kumar M S-PCS

[Girish S Marpalli]

Yes

On Sat, 20 May 2023, 11:36 pm Ashutosh Shukla, <imaash...@gmail.com> wrote:

No, that is not permitted nor is there any exemption from the applicability of the provisions of section 185 to the private limited companies. 

Thanks and Regards,

CS Ashutosh Shukla

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[Ronak Gupta]

Section 185 provides for the loan giving by the company and also for the guarantee or security of any loan to certain specified related persons.

However, as per June 5, 2015 notification of MCA a private limited company can avail the exemption from applicability of section 185 onto it.

On Sat, 20 May 2023 at 11:35 PM, Ashutosh Shukla <imaash...@gmail.com> wrote:

No, that is not permitted nor is there any exemption from the applicability of the provisions of section 185 to the private limited companies. 

Thanks and Regards,

CS Ashutosh Shukla

On Wednesday, May 17, 2023 at 5:08:52 PM UTC+5:30 Girish S Marpalli wrote:

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Thanks & Regards
Ronak Gupta
Company Secretary
New Delhi
9910226715

[Ashutosh Shukla]

Hi, 

I checked the notification G.S.R. 464(E) dated 5 June 2015. Yes, it does exempt private limited companies subject to certain conditions. Accordingly, if those conditions are satisfied, section 185 would not be applicable to a private limited company. I stand corrected. 

Thanks and Regards,

CS Ashutosh Shukla

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[CS Ranjan Patel]

If PVT LTD is exempt from complying with section 185, any prohibition in section 186 for loans to partnership firm?

[CS Ranjan Patel]

Please reply