BLOOMING IMPLICATIONS – SECTION 185 OF COMPANIES ACT, 2013

Section 185 of the new Companies Act, 2013 is in discussion now a days. The Section restrains Companies with common management to share loans or guarantees to each other, which in implication, if done on or after September 12, 2013 can impose a fine which shall not be less than Rs. 5 Lacs and which may extend to Rs. 25 Lacs and the Director to whom such loan, advance or guarantee is given or provided in connection with any loan taken by him or any other person, shall be punishable with imprisonment which may extend to 6 months or with fine which shall not be less than Rs. 5 Lacs which may extend to Rs. 25 Lacs, or with both.

Only exception stated in the section is that if the loan is being given to Managing Director or Whole-Time Director, either:

* (A) as a part of condition of service extended by the company to all its employees or pursuant to any scheme approved by the members by way of special resolution OR
* (B) a company which in the ordinary course of its business provides loans or gives guarantees or securities for the due repayment of any loan and in respect of such loans an interest is charged at a rate not less than the bank rate declared by the Reserve Bank of India

IMPORTANT DATES:

  • Companies having share capital, who have held their Annual General Meeting during September, 2013 need to file Annual Return with Registrar of Companies within 60 days of the holding Annual General.
  • Details related to issue of Share Capital/ Transfer of Share Capital to be reported in Annual Return of the Company

AMENDMENT IN NEGATIVE LIST ISSUED UNDER SERVICE TAX

The Central Government, under the power conferred under Section 93 of the Finance Act, 1994, issued a Circular vide No. 14/2013-Service Tax so as to include the following in the negative list as issued under Notification by Government of India in the Ministry of Finance (Department of Revenue) No. 25/2012-Service Tax dated 20.06.2012:

19A. Services provided in relation to serving of food or beverages by a canteen maintained  in a factory covered under the Factories Act, 1948 (63 of 1948), having the facility of air-conditioning or central air-heating at any time during the year

Source

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