Section 186 of Companies Act, 2013 / Income-tax Act, 2025 (formerly Income-tax Act, 1961) / SEBI Regulations / RBI Capital Market Norms

Corporate Financial Advisory & Capital Structuring

Strategic corporate financial advisory, optimal capital structure design, debt-equity balancing, corporate treasury governance, and tax-efficient capital distribution for enterprises.

CA Due Diligence

Official Portal Filing

State Stamp Advisory

Corporate Financial Advisory & Capital Structuring Statutory Advisory

Statutory Filing

MCA & Tax Practice

Relevant RegulatorMinistry of Finance, Ministry of Corporate Affairs (MCA), Reserve Bank of India (RBI) & SEBI

mca.gov.in

External link to the official website of the relevant authority. H A V N & COMPANY is not affiliated with any government authority.

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STATUTORY OVERVIEW

Corporate Financial Advisory, Capital Architecture & Treasury Governance

Optimal capital allocation is the single most critical determinant of long-term corporate value creation. Whether determining the right leverage ratio between bank debt and promoter equity, structuring inter-corporate loans and investments under Section 186 of the Companies Act, 2013, managing corporate treasury yields, or planning tax-efficient capital distributions under the Income-tax Act, 2025 (and 1961 Act), ad-hoc decision-making introduces fatal liquidity traps and punitive tax liabilities. Our Corporate Financial Advisory practice acts as a strategic financial architect, helping boards, CFOs, and business owners optimize Weighted Average Cost of Capital (WACC), protect balance sheet solvency, and maximize risk-adjusted shareholder returns.

Statutory & Practice Summary • At-A-Glance

ICAI UDIN Authentication Mandate

Governing Framework

Section 186 of Companies Act, 2013 / Income-tax Act, 2025 (formerly Income-tax Act, 1961) / SEBI Regulations / RBI Capital Market Norms

Regulatory Authority

Ministry of Finance, Ministry of Corporate Affairs (MCA), Reserve Bank of India (RBI) & SEBI

Professional Assurance

Chartered Accountants Attestation under ICAI Standards & Code of Ethics

DOCUMENTATION MATRIX

Mandatory Documents Checklist

Self-attested scanned copies required

1. Promoters / Partners / Directors KYC

✓Audited Balance Sheets, P&L Statements & Cash Flow Statements for Past 3 to 5 Years
✓Detailed Debt Schedule (Secured & Unsecured Loans, Interest Rates, Tenures, Covenants)
✓Schedule of Existing Inter-Corporate Loans, Guarantees & Investments (Section 186)
✓Current Share Capital Structure, Authorized Capital & Free Reserve Statements

2. Registered Office & Premises Proof

✓Monthly Operating Cash Flow Statements & 12-Month Rolling Cash Forecasts
✓Statutory Registers (Form MBP-2 for Loans & Investments under Section 186)
✓Corporate Investment Policy & Board Treasury Delegation Limits Manual
✓Company Income Tax Returns (ITR-6) and Tax Computation Worksheets

PROCEDURAL ROADMAP

Step-by-Step Filing & Approval Process

Structured execution roadmap managed by our Chartered Accountants from pre-filing due diligence to certificate allotment.

01Standard

Capital Structure Diagnostic

Analyzing cost of debt, cost of equity, debt maturity profile, and interest coverage ratios against industry peers.

02Standard

WACC & Treasury Engineering

Simulating optimal leverage scenarios, designing debt refinancing roadmaps, and formulating corporate treasury allocation rules.

03Standard

Regulatory & Statutory Structuring

Drafting board and shareholder resolutions for Section 180 and Section 186 compliance on mca.gov.in.

04Standard

Execution & Ongoing Treasury Review

Assisting in loan negotiations, surplus fund deployments, and quarterly treasury performance reporting to the Board.

Optimal Capital Structure & WACC Minimization

Practice Scope & Statutory Guidance

We evaluate your enterprise debt capacity, operational cash volatility, and asset tangibility to engineer an optimal capital structure. By balancing bank borrowing with equity, we lower your Weighted Average Cost of Capital (WACC) while maintaining safe Debt Service Coverage (DSCR) margins under RBI lending guidelines.

Inter-Corporate Loans & Section 186 Compliance

Practice Scope & Statutory Guidance

Under Section 186 of the Companies Act, 2013 on mca.gov.in, a company cannot give loans, guarantees, or make investments exceeding 60% of its paid-up share capital, free reserves, and securities premium, or 100% of free reserves and securities premium, without special resolution approval. We structure group financial assistance, verify interest rate floors aligned with RBI sovereign yields, and maintain statutory Form MBP-2 registers.

Tax-Efficient Capital Distribution & Treasury Planning

Practice Scope & Statutory Guidance

We advise leadership on optimal dividend distribution vs share buyback mechanisms under the modern corporate tax regime of the Income-tax Act, 2025 (formerly 1961 Act). Our treasury models allocate surplus corporate liquidity across low-risk, tax-efficient debt instruments, overnight funds, and arbitrage vehicles, ensuring daily liquidity while maximizing post-tax yields.

STATUTORY MATRIX

Statutory Provisions & Regulatory Comparative Matrix

Comparative analysis of governing sections under the new framework alongside legacy statutory references.

Capital Governance Mandate	Statutory Act & Section	Statutory Rule & Threshold	Governing Authority / Portal
Inter-Corporate Loans & Investments	Section 186 of Companies Act, 2013	Limit: 60% of (Paid-up Capital + Reserves + Premium) or 100% of (Reserves + Premium)	MCA / https://www.mca.gov.in/
Borrowing Powers of Board	Section 180(1)(c) of Companies Act, 2013	Special resolution required if total borrowing exceeds aggregate paid-up capital and free reserves	MCA / https://www.mca.gov.in/
Interest on Inter-Company Loans	Section 186(7) of Companies Act, 2013	Rate of interest cannot be lower than prevailing yield of 1/3/5/10 yr Govt Security	Reserve Bank of India / https://www.rbi.org.in/
Corporate Dividend Taxation	Income-tax Act, 2025 (formerly 1961 Act)	Taxable in hands of shareholders at slab rates; TDS under the corresponding section of the Income-tax Act, 2025 (formerly Sec 194)	Income Tax / https://www.incometax.gov.in/

ONGOING GOVERNANCE

Mandatory Post-Registration Compliances

Failing to complete statutory post-incorporation actions carries steep daily penalties. Our CA firm manages continuous compliance:

CompliancePeriodic

Form MGT-14 Special Resolution Filings

Mandatory electronic filing on mca.gov.in for borrowings or loans exceeding Section 180/186 statutory thresholds.

CompliancePeriodic

Statutory Register Form MBP-2 Maintenance

Maintaining physical and digital registers of loans, guarantees, security given, and acquisitions made under Section 186.

CompliancePeriodic

Quarterly Treasury Performance Reporting

Delivering executive treasury summaries tracking portfolio yields, credit rating changes, and liquidity buffers.

CompliancePeriodic

Annual Banking Covenant Certification

Issuing CA-certified financial covenant compliance reports to lenders monitoring debt-equity and interest coverage ratios.

FREQUENTLY ASKED QUESTIONS

Statutory FAQs & Practical Guidance

Frequently asked questions and procedural guidance regarding Corporate Financial Advisory & Capital Structuring.

What are the statutory limits on inter-corporate loans under Section 186 of the Companies Act?

Under Section 186 of the Companies Act, 2013 on the MCA portal (https://www.mca.gov.in/), a company cannot directly or indirectly give any loan, provide any guarantee, or acquire securities of any other body corporate exceeding 60% of its paid-up share capital, free reserves, and securities premium account, OR 100% of its free reserves and securities premium account, whichever is higher, without prior approval by a Special Resolution passed in a general meeting and filed in Form MGT-14.

What minimum interest rate must be charged on inter-company loans in India?

Under Section 186(7) of the Companies Act, 2013, no loan can be given at a rate of interest lower than the prevailing yield of one-year, three-year, five-year, or ten-year Government Security closest to the tenure of the loan. Giving interest-free loans to group entities is strictly illegal under the Act.

How are dividends taxed under the Income-tax Act, 2025?

Under the current direct tax regime of the Income-tax Act, 2025 (and 1961 Act on incometax.gov.in), dividends are taxable directly in the hands of shareholders at their applicable slab rates. Companies distributing dividends must deduct TDS under the corresponding section of the Income-tax Act, 2025 (formerly Section 194 of the 1961 Act) at 10% on payments exceeding Rs. 5,000.

How does capital structure optimization improve business valuation?

Capital structure optimization balances lower-cost tax-deductible debt with equity cushion to achieve the minimum overall Weighted Average Cost of Capital (WACC). Because enterprise valuation in Discounted Cash Flow (DCF) models is the present value of future cash flows discounted at WACC, minimizing WACC directly increases total enterprise and equity value.

STATUTORY ADVISORY DESK • PRACTICE INQUIRIES

Statutory Inquiries & Practice Advisory

Information on Corporate Financial Advisory & Capital Structuring is provided for general reference. Office addresses and contact details are listed on the Contact page.

Contact Practice Office +91 99140-14949