Friday, 12 February 2016

Clarification on ‪#‎Loans‬ and Advances to ‪#‎Employees‬: Section 186 Company ACT 2013

Clarification on ‪#‎Loans‬ and Advances to ‪#‎Employees‬: Section 186 of the Companies Act, 2013 imposes
restriction on companies from giving loans to any person more than a threshold level. The Ministry of
Corporate Affairs vide General Circular No. 04/2015 dated 10.03.2015, clarified that loans and/or advances to their employees, other than managing and whole time directors, are not governed by the requirements of section 186. It is also clarified that such loans/ advances to employees should be in accordance with the conditions of service applicable to employees and
with the remuneration policy.

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