Loan to Directors: Guarantee Against Loan from Banks and Financial Institutions -- A Perspective from Section 185 of the Companies Act, 2013

Abstract

India saw the enactment of the Companies Act, 2013 ("Act"), replacing the Companies Act, 1956, which governed the incorporation, functioning, transactions and other activities of the companies in India. Witnessing uproar from corporate India, much discussion was seen in the arena of loans and guarantees, e-commerce business, and corporate social responsibility, amongst others. This article, while examining the provisions of section 185 of the new Act, throws light specifically on guarantees against loans from banks and financial institutions.