Sole selling agent
This query is : Resolved
22 September 2013
In which of the following ways does a sole selling agent appointed u/s 294AA of Companies Act, 1956 functions :
(i) The Co sells goods to sole selling agent and then the sole selling agent sells it to the customers. or
(ii) The sole selling agent acquires various customers on behalf of the company and the sale takes place directly from the company to such customers.
Also
2. Please give reference of a company which has appointed a sole selling agent?
3. How is the invoicing to be done, both for Co and the Agent?
4. Which is the governing section for sole selling agent's under the Companies Act, 2013?
Best regards,
Souvik Ghosh
(i) The Co sells goods to sole selling agent and then the sole selling agent sells it to the customers. or
(ii) The sole selling agent acquires various customers on behalf of the company and the sale takes place directly from the company to such customers.
Also
2. Please give reference of a company which has appointed a sole selling agent?
3. How is the invoicing to be done, both for Co and the Agent?
4. Which is the governing section for sole selling agent's under the Companies Act, 2013?
Best regards,
Souvik Ghosh
23 September 2013
Section 294(2) of the Companies Act, 1956 provides that the Board of a company, whether it is a public or private having paid-up capital of less than Rs. 50 lakhs, may appoint sole selling agents, for a period not exceeding five years at a time subject to the condition for approval of members in first general meeting after such appointment and further condition that the appointment shall cease to be valid if it is not approved by an ordinary resolution passed by the company in the first general meeting held after the date of his appointment.
In view of language employed in section 294(2) the restrictions imposed by the Legislature that the appointment shall cease to be valid if it is not approved by the company in the first general meeting held after the date on which the appointment is made, is mandatory in nature. [Kasargod (A.V.) v Registrar of Companies (2001) 105 Comp Cas 676/34 SCL 586 (Kar)].
If resolution is not approved at the first general meeting after the appointment of agent the appointment is void and even subsequent approval by the shareholders cannot resuscitate it; 'not approved' includes cases where matter is not placed before general meeting, or if placed, is not considered by meeting. [Shalagram Jhajharia v National Co. Ltd. (1965) 35 Comp Cas 706 (Cal)].
Section 294(1) provides that a company shall not appoint a sole selling agent for any area for a term exceeding five years at a time.
There can be only one sole selling agent in an area in respect of all the goods dealt with by the company. [CIT v Principal Officer C/o Arkay Wires (P) Ltd. (2005) 58 SCL 97 (All)].
Section 294(2) of the Companies Act, 1956 provides that the Board of a company, whether it is a public or private having paid-up capital of less than Rs. 50 lakhs, may appoint sole selling agents, for a period not exceeding five years at a time subject to the condition for approval of members in first general meeting after such appointment and further condition that the appointment shall cease to be valid if it is not approved by an ordinary resolution passed by the company in the first general meeting held after the date of his appointment.
In view of language employed in section 294(2) the restrictions imposed by the Legislature that the appointment shall cease to be valid if it is not approved by the company in the first general meeting held after the date on which the appointment is made, is mandatory in nature. [Kasargod (A.V.) v Registrar of Companies (2001) 105 Comp Cas 676/34 SCL 586 (Kar)].
If resolution is not approved at the first general meeting after the appointment of agent the appointment is void and even subsequent approval by the shareholders cannot resuscitate it; 'not approved' includes cases where matter is not placed before general meeting, or if placed, is not considered by meeting. [Shalagram Jhajharia v National Co. Ltd. (1965) 35 Comp Cas 706 (Cal)].
Section 294(1) provides that a company shall not appoint a sole selling agent for any area for a term exceeding five years at a time.
There can be only one sole selling agent in an area in respect of all the goods dealt with by the company. [CIT v Principal Officer C/o Arkay Wires (P) Ltd. (2005) 58 SCL 97 (All)].
23 September 2013
New Companies Act, 2013 is not talking about sole selling agent.
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