Applicability of section 297
This query is : Resolved
CA, CS Kavit S Shah
(Querist)
29 August 2012
Dear Expert,
Please let me know whether any transaction between Public Ltd Co. & Deemed Public Co (i.e. Pvt Co which is Subsidiary of Public Co) will attract provision of Section 297
Please let me know whether any transaction between Public Ltd Co. & Deemed Public Co (i.e. Pvt Co which is Subsidiary of Public Co) will attract provision of Section 297
Jiten Gupta
(Expert)
29 August 2012
No, If both are Public Ltd then 297 will not come into picture.
A Pvt Ltd which is a subsiadiary of Public is a Public Ltd as per the Companies Act and all provisions on that company shall be as per the Public Company.
A Pvt Ltd which is a subsiadiary of Public is a Public Ltd as per the Companies Act and all provisions on that company shall be as per the Public Company.
CA, CS Kavit S Shah
(Querist)
29 August 2012
SO CG approval will be required in case of any transaction between Public Ltd & Pvt Co which is Subsidiary of Public co.
Jiten Gupta
(Expert)
29 August 2012
If 297 is not applicable then why would CG approval be required?
Ajay Mishra
(Expert)
29 August 2012
Hi
I agree with expert up to some extent that section 297 will not apply on contract maid between two public companies.
But the provision of section 297 will apply to contract on private company which is subsidiary of public company. If a public company enter it a contract with private company which is a subsidiary of public company in that case also section 297 will apply.
I agree with expert up to some extent that section 297 will not apply on contract maid between two public companies.
But the provision of section 297 will apply to contract on private company which is subsidiary of public company. If a public company enter it a contract with private company which is a subsidiary of public company in that case also section 297 will apply.
Jiten Gupta
(Expert)
29 August 2012
Ajay Sir, How will the Section 297 apply? I agree that Section 297 does not exclude Deemed Public company but it also does not include the same.
And by definition of deemed public company, provisions on thta company shall be as per the Public company.
And by definition of deemed public company, provisions on thta company shall be as per the Public company.
Ajay Mishra
(Expert)
29 August 2012
Hi
Generally provisions of Companies Act, 1956 specify whether this section apply to private companies which is subsidiary of public or not but section 297 does not mentioned that line so, I think section will not give any liberty to deemed public company.
Generally provisions of Companies Act, 1956 specify whether this section apply to private companies which is subsidiary of public or not but section 297 does not mentioned that line so, I think section will not give any liberty to deemed public company.
CA, CS Kavit S Shah
(Querist)
29 August 2012
So what is the final conclusion on that because one of our client has to pay fine under CLSS for non compliance of section 297 as they have done the transaction which attracts the provision of Section 297
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