Companies Act, 2017

PART-VII

DISQUALIFICATION OF DIRECTORS BY THE COMMISSION

From: 2023-11-01 - To: 0000-00-00 182. Loans to directors: requirement of members’ approval- (1) A company shall not- (a) make a loan to a director of the company or of its holding company; or to any of his relatives; (b) give a guarantee or provide security in connection with a loan made by any person to such a director; or to any of his relatives 1[;] 2[unless the transaction has been approved by a resolution of the members of the company:] 2[Provided that nothing in this section shall apply to the loan provided to the chief executive or the whole time director subject to the condition that the loan is granted under a scheme approved by the members of the company:] Provided 3[***] that in case of a listed company, approval of the Commission shall also be required before sanctioning of any such loan. Explanation - For the purpose of this section “relative” in relation to a director means his spouse and minor children. (2) Nothing contained in sub-section (1) shall apply to a company which in the ordinary course of its business provides loans or gives guarantees or securities for the due repayment of any loan. (3) Every person who is a party to any contravention of this section, including in particular any person to whom the loan is made or who has taken the loan in respect of which the guarantee is given or the security is provided, shall be punishable with fine which may extend to one million rupees or with simple imprisonment for a term which may extend to one year. (4) All persons who are parties to any…