MCA CLARIFICATION ON WITH REGARD TO SECTION 185 and 186 OF THE COMPANIES ACT 2013
Ministry of Corporate Affairs has vide its Circular No. 04/2015, dated 3rd March 2015, has issue clarification on applicability of provisions of section 186 of the Companies Act, 2013 relating to grant of loans and advances by Companies to their employees
According to this circular ‘loans and/or advances made by the companies to their employees, other than the managing or whole time directors (which is governed by section 185) are not governed by the requirements of section 186 of the Companies Act, 2013.
This clarification will, however, be applicable if such loans/advances to employees are in accordance with the conditions of service applicable to employees and are also in accordance with the remuneration policy, in cases where such policy is required to be formulated.
You can download this circular form the following link.
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