PART - V 
LOANS, INVESTMENTS, GUARANTEES AND DONATIONS   Powers to Make Loans

31. i.  A  company  whose  main  business  is  banking,  insurance  or financing or  taking and  giving loans  may use  its funds  for making loans. 

ii. Loans  may be  made by any other company only to its subsidiary or Holding Company on commercial terms approved by its Board. 

iii. Where there is any doubt about the main business of a company the matter shall  be decided  by the  Department upon  application by  any interested person  and the  decision of  the Department shall be final and binding. 

Investments 

32. i.  A company whose main business in banking, insurance, financing or investment  or trading  in shares may keep funds invested in shares and debentures of other companies or bodies corporate. 

ii. Any other company may invest its funds - 

a.  in any of the recognised financial institutions in Bhutan; 

b.  in  the   shares  of  another  company  with  the  approval  of shareholders. 

iii. Investments  in shares  or debentures  of a foreign company shall require the prior approval of the government. 

iv. All  investments made  by a  company must  be held in its own name except where  the investment  is pledged  as a  security for  any loan taken by  the  company  or  for  the  performance  of  any  obligation undertaken by the company in relation to its business. 

Guarantees

33. i.  A company  may give  a guarantee  in connection  with any loan taken  by   its  subsidiary  or  any  performance  of  any  obligation undertaken by it or its subsidiary, as the case may be. 

ii. Save  as aforesaid, a company shall not give any guarantee for and on behalf  of any  person except where it is necessary in the interest of the business of the company. 

iii. Guarantees given by financial institutions in the course of their business shall not fall within the purview of section 33. 

Donations 

34. A company shall have power to make donations of reasonable amounts with the approval of the Board.