Section 186 of the Companies Act, 2013 provides for the loans and investments that can be made by a company. It states that a company can make investments through more than two layers of investment companies.
Section 186 of the Companies Act, 2013 also states that a company cannot directly or indirectly:
The rate of interest chargeable should be more than the prevailing yield of Government Security closest to the period of the loan.
If a company contravenes any of the provisions of this section, the punishment would be as follows
Fine – Minimum Rs. 25000 and,
Maximum Rs. 5,00,000
For an official in default
Maximum Imprisonment – 2 years; and
Fine – Minimum Rs. 25,000 and,
Maimum Rs. 1,00,000