sec297
This query is : Resolved
Guest
Guest
(Querist)
17 December 2010
A private company having paid up capital of rs. 1 crore enters into transaction with another private co. and they have common directors so they are related parties. the another or opposite party is having paid up of less than 1 crore. so i think as per section 297 of Companies Act, 1956 if a private company having paid up capital of Rs. One Crore or more enters into a transaction with another private company whose paid up capital is less than Rs. One Crore, then former company needs to take prior Central government approval and board consent before entering into the said transaction/arrangement.But no such action took place.
so kindly advice me the consequences. Is it falls under Condonation for delay or Compounding of offences???????????
so kindly advice me the consequences. Is it falls under Condonation for delay or Compounding of offences???????????
17 December 2010
Your case falls under Section 297 for which CG (delegated to RD) approval is required.
You have to apply to RD for approval of related party transactions.
However it's a case of continuing offence, hence first apply for compounding u/s 621A. Once compounding application is made, you can apply for approval simultaneously.
You have to apply to RD for approval of related party transactions.
However it's a case of continuing offence, hence first apply for compounding u/s 621A. Once compounding application is made, you can apply for approval simultaneously.
17 December 2010
Hi..
U have correctly interpreted the provisions of section 297 of the Companies Act, 1956.
U will have to go for compounding of offence.
God Bless
Udit Sharma
U have correctly interpreted the provisions of section 297 of the Companies Act, 1956.
U will have to go for compounding of offence.
God Bless
Udit Sharma
17 December 2010
Hi! One thing I forget. Section 297 is attracted only for entering into contracts for sale, purchase or supply of goods, materials or services. If the transaction is other than this viz., giving loans, etc. no need for CG approval.
17 December 2010
Penalty can be imposed u/s 629A and the same is compoundable u/s 621A. Then act according to the 1st reply otherwise the contract will become void.
17 December 2010
If the purchase of goods & materials from the company, or the sale of goods and materials to the company, by any director, relatives, firm, partner or private limited company for CASH at prevailing market price, then no needs to take prior Central government approval and board consent before entering into the said transaction/arrangement.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Unanswered Queries
- CAPITAL GAIN REDEVELOPED FLAT
- Multiple payment of self assessment tax for A Y 2025-2026
- Requirement under FEMA &RBI
- REGARDING ITR FILING QUESTION
- Short Term Gain Reporting ITR
- ITC BENEFIT ON BROKRAGE PAID
- Query regarding reporting of exempt foreign remuneration in ITR
- Taxation on Old jewellery sold
- TDS refund Indemnity Bond
- Gst reverse charge mechanism to be claimed in the month of payment
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
- NRI ITR2 account in 2025-26.
- Query regarding reporting of exempt foreign remuneration in ITR (AY 2026-27)
- FEMA/RBI treatment — Amazon.ca arbitrage (US buy, Canada sell, goods never enter India)
- Goods return by customer
- INWARD REMITTANCE FOREIGN
- CPC and SAC
- Account freezed for Ineligible ITC Scrutiny for GST Annual Return
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
