02 / Apr 2015
2015
Loans made by Companies to their Employees, not Governed by the Requirements of Section 186
The Ministry of Corporate Affairs has vide General Circular No. 04/2015 on March 10, 2015, clarified that loans and/or advances made by 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.
To know more about this Section 186 and its applicability, Click on the link below:
Loans and Guarantees by a Company (Section 186 Clarification)