Practice free →
HomeLLMLawCorporate Law › Under Section 67 Companies Act 2013, a PUBLIC co…

Under Section 67 Companies Act 2013, a PUBLIC company is prohibited from giving financial assistance for:

Apurchase of its own shares or shares of its holding company (with specified exceptions)
Bpurchase of any vehicle for company executives at any time during their employment
Cpurchase of office furniture and equipment for corporate use, with no exceptions
Dpurchase of training or skill development courses for company employees
Answer & Solution
Correct answer: A. purchase of its own shares or shares of its holding company (with specified exceptions)
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_
Solve this in the app — LLM practice & 24k+ MCQs →
Related questions