Chirag Tekwani ( Ahmedabad )
13-Nov-2022 12:40 AM
Chapter 10 other borrowing tools
I have a doubt in section 186 of companies act and it is that if a company gives loan or provides security or guarantee in respect of such loan exceeding 60% of paid up share capital , free reserves and securities premium account or 100 % of free reserves and securities premium account , so in a financial year if it exceeds the limits as stated above so special resolution which the company passes will be valid for for such particular transcation or such resolution will be valid for only for such financial year and another special resolution is required to be passed for giving loan or providing security or guarantee in respect of such loan which exceeds the limit?
As per provisions of Section 186, when company gives loan or guarantee or provide security and if the aggregate amount of loan and investment after granting this loan or guarantee exceeds the limit under 186. A special resolution is required to be passed before giving loan or guarantee or providing security. The amount is also required to be mentioned in the resolution. The Company have to check this limit every time before giving loan or providing security or guarantee and pass a special resolution if required. This resolution will be valid for the transaction and company will not required to pass the resolution again in next year for same transaction.
Answer given by Shubhamm Sir at 24-Nov-2022 08:57 PM