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Sakshi Choudhary   11 January 2022

Inter Corporate Loans and advances section 186 of Companies Act 2013

According to section 186 of Companies Act, the section is not applicable on loan granted by Infrastructure company.
However if a company engaged in infrastructure projects is to obtain loan from its group companies would it still not be applicable?


Learning

 1 Replies

Aryan Raj   12 January 2022

In response to your query,

Non-applicability of Section 186 With respect to loans, guarantee or security

  1. A banking company in the ordinary course of its business
  2. An insurance company in the ordinary course of its business
  3. A housing finance company in the ordinary course of its business
  4. A company engaged in the business of financing of companies or of providing infrastructural facilities.

Hence the answer is no the company you mention cannot get a loan from even its own group companies. But here are some other ways to finance infrastructural companies which you can check-

  • Public Finance.
  • Supra National Financial Institutions.
  • Private Finance.
  • Public-Private Partnership.

Regards,

Aryan Raj 


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