Raman is a director of Mega Ltd., a company engaged in the business of selling mineral water. Rohini, wife of Raman, is a partner in M/s. Total, a partnership firm, engaged in the business of selling packaged juices. Ram

According to section 185(1) of the Companies Act, 2013, no company shall, directly or indirectly, advance any loan, including any loan represented by a book debt to, or give any guarantee or provide any security in connection with any loan taken by: any director of company, or of a company which is its holding company or any partner or relative of any such director; or any firm in which any such director or relative is a partner. Accordingly, based on the above provisions of Section 185(1) of the Companies Act, 2013, Mega Ltd. cannot grant loan to M/s. Total, since it is a partnership firm in which wife of Raman (Director of the lending company) is a partner. Section 185(2) of the Companies Act, 2013 prescribes that a company may advance any loan including any loan represented by a book debt, or give any guarantee or provide any security in connection with any loan taken by any person in whom any of the director of the company is interested, subject to the condition that- A special resolution is passed by the company in general meeting: Provided that the explanatory statement to the notice for the relevant general meeting shall disclose the full particulars of the loans given, 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 and any other relevant fact; and the loans are utilised by the borrowing company for its principal business activities. The expression 'any person in whom any of the director of the company is interested' includes any private company of which any such director is a director or member. Accordingly, by complying with the conditions as prescribed above under Section 185(2) of the Companies Act, 2013, Mega Ltd. can grant loan to Zimba Pvt. Ltd. in which Raman is a member holding 100 shares.