Amendment in Section 186 of the Companies Act 2013

Ministry of Corporate Affairs has vide Companies (Removal of Difficulties) Order, 2015, dated 13th February 2014 amended section 186 (Loan and Investment by Company). As per this order in section 186 of the Companies Act, 2013, in sub-section (11), in clause (b), after item (b) (iii), the following item shall be inserted, namely:-

“(iv) made by a banking company or an insurance company or a housing finance company, making acquisition of securities in the ordinary course of its business.”.

 Effect of amendment:

 Section 186 of the Companies Act, 2013 governs loan and investment made by Companies. Sub section (11) provides exemptions to certain classes of Companies. Earlier exemption was not provided  to a banking   company   or an   insurance company   or   a   housing   finance   company   making     acquisition     of securities   in its ordinary course of business. This order removes this difficulty and henceforth acquisitions of securities by these companies are also exempt from the purview of section 186.

You can download the order from the following link;

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