What Are The Likely Risk Implications when a Limited Company Transfers Assets of over Rs.1 Crore only on the basis oral agreement between the two parties.
11 July 2007
Oral agreements can not be challenged in a court of law. Board would generally not permit director to "execute transactions specially material and capital nature on a oral basis.
Auditor may also qualify the report in absence of any written agreement/contract
12 July 2007
What do you mena by transfer ? Is it sale ? If yes, then consider the following : Are the party involved are related parties ? Whether Rs 1 Crore is a material amount keeping in view the Asset base of the company ? Such transaction should not be execute without proper documentation keeping in view the requirement of CARo and Corporate Governance.
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