Section 297 approval

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CS Premjith (Querist)

31 January 2012 Frdz,plz clarify whether e form 24A may be used for the simplified procedure for obtaining online approval of central government under section 297 of the companies act....

MCA in its circular no: 52/2011 dated 25 July 2011 in para 2 has mentioned that the application need to be made in new e form with the prescribed fee.

as u all know, the major highlight of the process is that such contract has to be approved by shareholders by way of special resolutions in a general meeting, and seek the approval online.

plz guide.

Jiten Gupta

Jiten Gupta (Expert)

31 January 2012 Yes, E-Form 24A available at Ministry Website can be used for the purpose of section 297 as well as for the circular 52/2011

Process would be as follows

Convene Board Meeting and General Meeting (Special resolution) with regard to following point...

(i) Proposed contract is competitive, at an arm’s length, without conflict of interest and is not less advantageous to it as compared to similar contracts with other parties.

(ii) The company has not made any default in repayment of any of its debts (including
public deposits) or debentures or interest payable thereon and has filed its upto date
Balance Sheets and Annual Returns with the Registrar of Companies;

(iii) The proposed contract is falling within the provisions of section 297 of the Act and provisions of sections 198, 269, 309, 314 and 295 are not applicable in the proposed contract.

(iv) The company and its Directors have complied with the provisions of sections 173, 287, 299, 300, 301 and other applicable provisions of the Companies Act, 1956 with regard to the proposed contract.

File E Form 23

Take approval of CG by filing 24A

attach Resolution passed in BM and GM with E-Form 24A..

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CS Premjith

CS Premjith (Querist)

01 February 2012 so, lets forget abt a new form specifiaclly for the purpose and stick on to 24a.

thanks

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