Under Section 67 Companies Act 2013, a PUBLIC company is prohibited from giving financial assistance for:
Answer & Solution
Correct answer: A.
1. Section 67(2) Companies Act 2013: 'No public company shall give, whether directly or indirectly and whether by means of a loan, guarantee, the provision of security or otherwise, any FINANCIAL ASSISTANCE for the purpose of, or in connection with, a purchase or subscription made or to be made, by any person of or for any shares in the company or in its holding company.'
2. Exceptions in proviso: (a) banking company in ordinary course of business; (b) loan/guarantee given by company for ESOP scheme; (c) loan to employees other than directors/KMP for purchase or subscription of fully paid-up shares for amounts up to 6 months' salary.
3. The English origin is Section 54 Companies Act 1948 (UK), prohibiting 'financial assistance'.
4. Hence option A is correct.
_Source: Companies Act 2013 (Act 18 of 2013), Govt. of India MCA — Companies Act 2013, Section 67(2); historical English origin: Section 54 Companies Act 1948_
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