Amended and updated notes on section 378ZK of the Companies Act 2013 as amended by the Companies (Amendment) Act, 2020 and Company Rules made there under. Detail discussion on provisions and rules related to Loan, etc., to Members.
Chapter XXIA PART-VII (Section 378ZK to 378ZL) of the Companies Act 2013 (CA 2013) deals with the provisions related to loans to members and investments. Section 378ZK of CA 2013 provides for Loan, etc., to Members.
Recently, we have discussed in detail section 378ZJ (Issue of bonus shares) of CA 2013. Today, we learn the provisions of section 378ZK of the Companies Act 2013.
In exercise of the powers conferred by sub-section (2) of section 1 of the Companies (Amendment) Act, 2020 (29 of 2020), the Central Government appoints the 11th February, 2021 as the date on which the provisions of section 52 of the Companies (Amendment) Act, 2020 shall come into force.
Accordingly, the provisions of section 378ZK are effective from 11th February, 2021. You may refer Notification No. S.O. 644(E) dated 11-02-2021. In this article, you will learn detail of the provisions of section 378ZK the Companies Act 2013.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | XXIA (PART-VII) |
| Chapter Name | Loans to Members and Investments |
| Section No. | 378ZK |
| Section Name | Loan, etc., to Members |
| Monthly Updated Edition | Company Law PDF |
Section 378ZK: Loan, etc., to Members
The Board may, subject to the provisions made in articles, provide financial assistance to the Members of the Producer Company by way of—
- (a) credit facility, to any Member, in connection with the business of the Producer Company, for a period not exceeding six months;
- (b) loans and advances, against security specified in articles to any Member, repayable within a period exceeding three months but not exceeding seven years from the date of disbursement of such loan or advances:
Provided that any loan or advance to any director or his relative shall be granted only after the approval by the Members in general meeting