Crown Ltd. has proposed to come out with a public issue of equity shares and in order to enable their employees to subscribe to the Company's shares, wants to extend loans to the employees including directors and key man

Section 67(2) of the Companies Act, 2013 provides that 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 purchase or subscription to be made by any person for any shares in the company or its holding company. However, under section 67(3)(c) the above restriction does not apply to a loan by a company to persons in the employment of the company other than its directors or key managerial personnel, for an amount not exceeding their salary or wages for a period of 6 months with a view to enabling them to purchase or subscribe for fully paid up shares in the company or its holding company to be held by them by way of beneficial ownership. In view of the above, Crown Ltd. can provide a loan up to a maximum of 6 months' salary or wages to their employees, but not to any director or key managerial personnel as such persons are explicitly excluded in the section.