law: Companies Act, 2013 
  186.
  
    Loan
  
  and investment by company.
  1.      Without prejudice to
  
  the provisions contained in this Act, a company shall unless otherwise
  
  prescribed, make investment through not more than two layers of investment
  
  companies:
  Provided
  
  that the provisions of this sub-section shall not affect,Ś
               
  
   i.        
  
    a
  
  company from acquiring any other company incorporated in a country outside
  
  India if such other company has investment subsidiaries beyond two layers as
  
  per the laws of such country;
              
  
   ii.        
  
    a
  
  subsidiary company from having any investment subsidiary for the purposes of
  
  meeting the requirements under any law or under any rule or regulation framed
  
  under any law for the time being in force.
  2.      No company shall
  
  directly or indirectly Ś
  a.     
  
    give
  
  any loan to any person or other body corporate;
  b.    
  
    give
  
  any guarantee or provide security in connection with a loan to any other body
  
  corporate or person; and
  c.     
  
    acquire
  
  by way of subscription, purchase or otherwise, the securities of any other body
  
  corporate, exceeding sixty per cent. of its paid-up share capital, free
  
  reserves and securities premium account or one hundred per cent. of its free
  
  reserves and securities premium account, whichever is more.
  1.     
  2.     
  3.      Where the giving of
  
  any loan or guarantee or providing any security or the acquisition under
  
  sub-section (2 ) exceeds the limits specified in that sub-section, prior
  
  approval by means of a special resolution passed at a general meeting shall be
  
  necessary.
  4.      The company shall
  
  disclose to the members in the financial statement the full particulars of the
  
  loans given, investment made or guarantee given or security provided and the
  
  purpose for which the loan or guarantee or security is proposed to be utilised
  
  by the recipient of the loan or guarantee or security.
  5.      No investment shall
  
  be made or loan or guarantee or security given by the company unless the
  
  resolution sanctioning it is passed at a meeting of the Board with the consent
  
  of all the directors present at the meeting and the prior approval of the
  
  public financial institution concerned where any term loan is subsisting, is
  
  obtained:
  Provided
  
  that prior approval of a public financial institution shall not be required
  
  where the aggregate of the loans and investments so far made, the amount for
  
  which guarantee or security so far provided to or in all other bodies corporate,
  
  along with the investments, loans, guarantee or security proposed to be made or
  
  given does not exceed the limit as specified in sub-section (2 ), and
  
  there is no default in repayment of loan instalments or payment of interest
  
  thereon as per the terms and conditions of such loan to the public financial
  
  institution.
  1.     
  2.     
  3.     
  4.     
  5.     
  6.      No company, which is
  
  registered under section 12 of the Securities and Exchange Board of India Act,
  
  1992 and covered under such class or classes of companies as may be prescribed,
  
  shall take inter-corporate loan or deposits exceeding the prescribed limit and
  
  such company shall furnish in its financial statement the details of the loan
  
  or deposits.
  7.      No loan shall be
  
  given under this section at a rate of interest lower than the prevailing yield
  
  of one year, three year, five year or ten year Government Security closest to
  
  the tenor of the loan.
  8.      No company which is
  
  in default in the repayment of any deposits accepted before or after the
  
  commencement of this Act or in payment of interest thereon, shall give any loan
  
  or give any guarantee or provide any security or make an acquisition till such
  
  default is subsisting.
  9.      Every company giving
  
  loan or giving a guarantee or providing security or making an acquisition under
  
  this section shall keep a register which shall contain such particulars and
  
  shall be maintained in such manner as may be prescribed.
  10.   The register referred
  
  to in sub-section (9 ) shall be kept at the registered office of the
  
  company and Ś
  a.     
  
    shall
  
  be open to inspection at such office; and
  b.    
  
    extracts
  
  may be taken therefrom by any member, and copies thereof may be furnished to
  
  any member of the company on payment of such fees as may be prescribed.
  1.  
  2.  
  3.  
  4.  
  5.  
  6.  
  7.  
  8.  
  9.  
  10.  
  11.   Nothing contained in
  
  this section, except sub-section (1 ), shall applyŚ
  a.     
  
    to
  
  a loan made, guarantee given or security provided by a banking company or an
  
  insurance company or a housing finance company in the ordinary course of its
  
  business or a company engaged in the business of financing of companies or of
  
  providing infrastructural facilities;
  b.    
  
    to
  
  any acquisitionŚ
                       
  
   i.        
  
    made
  
  by a non-banking financial company registered under Chapter IIIB of the Reserve
  
  Bank of India Act, 1934 and whose principal business is acquisition of
  
  securities:
  Provided
  
  that exemption to non-banking financial company shall be in respect of its
  
  investment and lending activities;
                      
  
   i.        
  
  
                      
  
   ii.        
  
    made
  
  by a company whose principal business is the acquisition of securities;
                     
  
   iii.        
  
    of
  
  shares allotted in pursuance of clause (a ) of sub-section (1 ) of
  
  section 62.
  1.  
  2.  
  3.  
  4.  
  5.  
  6.  
  7.  
  8.  
  9.  
  10.  
  11.  
  12.   The Central
  
  Government may make rules for the purposes of this section.
  13.   If a company
  
  contravenes the provisions of this section, the company shall be punishable
  
  with fine which shall not be less than twenty-five thousand rupees but which
  
  may extend to five lakh rupees and every officer of the company who is in
  
  default shall be punishable with imprisonment for a term which may extend to
  
  two years and with fine which shall not be less than twenty-five thousand
  
  rupees but which may extend to one lakh rupees.
  Explanation. ŚFor the purposes of
  
  this section,Ś
  a.     
  
    the
  
  expression ōinvestment companyö means a company whose principal business is the
  
  acquisition of shares, debentures or other securities;
  b.    
  
    the
  
  expression ōinfrastructure facilitiesö means the facilities specified in
  
  Schedule VI.