Loans to Directors, Section 185
The promoter has drawn Rs 40 lakh from the company's account and the accountant has booked it to "Director's current account", this is the section that decides whether that is a book entry or a criminal offence.
- 6 pages
- 68
- Word and PDF
- 12 September 2026
The 3 formats inside
- 1Board resolution, loan to a person in whom a director is interested, subject to a special resolutions.185(2), s.186(5)On its own₹149
- 2Special resolution and explanatory statement, loan under section 185(2)s.185(2), s.102On its own₹149
- 3Loan agreement, skeletons.185(2), s.186On its own₹149
Read the opening
The first part of “Board resolution, loan to a person in whom a director is interested, subject to a special resolution”, as it downloads. Blanks are highlighted.
Certified true copy of the resolution passed at the meeting of the Board of Directors of [ABC Private Limited] held on [Date of the board meeting]
LOAN TO [XYZ PRIVATE LIMITED] UNDER SECTION 185(2)
The Chairman informed the Board that [XYZ Private Limited] has requested a loan of [Rs ____ (Rupees ____ only)] for the purpose of [stating the principal business activity for which the loan is to be utilised]. He further informed the Board that [Interested director's name], a Director of the Company, is [a director / a member] of [XYZ Private Limited], and that the said company is accordingly a person in whom a Director of the Company is interested within the meaning of the Explanation to Section 185 of the Companies Act, 2013. The loan may therefore be advanced only after the Members have approved it by a special resolution and on the condition that it is utilised by the borrowing company for its principal business activities.