MCA Clarification On Applicability of Section 372A of of Companies Act, 1956

Consequent to notification of Sec 185 of Companies Act 2013 (dealing with loans to directors) and which is corresponding to Section 295 of the Companies Act, 1956, MCA has received several representations. Section 186 of the Companies Act, 2013 is yet to be notified.  MCA has now clarified that Sec 372A of the Companies Act 1956 (dealing with inter-corporate loans) continues to remain in force till Sec 186 of Companies Act 2013 is notified.

Text of the Notification is as follows :-

General Circular 18/2013,

Dated: 19/11/2013

No. 17/202/2013-CL-V

Sub: – Clarification with regard to applicability of provision of Section 372A of the Companies Act, 1956.

Sir,

This Ministry has received number of representations consequent upon notifying Section 185 of the Companies Act, 2013 dealing with loans to directors which is corresponding to Section 295 of the Companies Act, 1956. Section 186 of the Companies Act, 2013 is yet to be notified.

It is clarified that Section 372A of the Companies Act, 1956 dealing with inter-corporate loans continue to remain in force till section 186. of the Companies Act, 2013 is notified.

This issues with the approval of competent authority.

Yours Faithfully,

(Kamna Sharma)

Assistant Director