According to Section 67 of the Companies Act, 2013, No public company shall give any financial assistance for the purpose of or in connection with a purchase or subscription made. This restriction on financial assistance shall not apply to the purchase of or subscription for the shares held by trustees for the benefit of the employees or such shares held by the employees of the company. The Provision has been discussed earlier here. The Rule 16 of the Companies (Share Capital and Debentures) Rules 2014 makes detailed provision for this purpose.
Conditions:
The company shall not make a provision of money for the purchase of, or subscription for, shares in the company or its holding company, for the purchase of, or the subscription for, the shares by trustees is for the shares to be held by or for the benefit of the employees of the company, unless it complies with the following conditions, namely:-
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