301 register

Hi Priya,

As it is a transaction in immovable property Section 297 shall not apply. (DCA Letter No. 9/4190-CL-X, dated March 27, 1990)

However Section 299 and 300 is 100% applicable and disclosure of interest by director in BM is mandatory to validate the transaction.

Even if the transaction is not covered by Section 297 still you need to enter the particular of contract in 301 register as there is clear mandate to that effect in Section 301(1).

Answer above is based on my personal understanding of Law. Views of other learned members solicited.

Best Regards

Hi

Sincere Thanks for fast reply respected sirs..

Here the Subsidiary is a Pvt Co.

So even when Sec 297 is not attracted, sec 299 is attracted because the Directors are interested. If any one of Sec 297 or 299 is attracted the contract should be entered in 301 register??

yes. if sec 297 or 299 is attracted, then it should be entered in the register 301.

Hi Priya,

If any one of Sec 297 or 299 is attracted the contract should be entered in 301 register??==YES

Regards

Sec 299 apply and all the transactions need to be entered in sec 301 register.

Dear All

Sec 299 is not applicable if the Directors together with relatives hold less than 2% in the other company.

In this case the Directors donot hold shares in the Subsidiaries. The Holding co controls the Composition of the Board.

So is sec 299 applicable or not?

 i think Mr Ajay Misra veiw  is right . 

Yes section 299 is applicable.

As 299 is all about direct or indirect interest.

Dear Mr Ankur. My principal has a different view. As per him since the directors doesnt hold shares sec 299 is not attracted...

I am still confused....!?

Yes, thus if there is no shareholding of directors, it is quite clear by way of sub section (6) of section 299 that the provisions of section 299 are not applicable.

And in my opinion section 297 is also not applicable as sec297(1)provides as under

except with the consent of the Board of Directors of a company a director of the company or his relative, a firm in which such a director or relative is a partner, any other partner in such a firm, or a private company of which the director is a member ir director shall not enter any conctract with the company -

(a) for the sale, purchase or supply of any goods, materials or service.

And your company does not comes with in that. And the contract is also not for the sale, purchase or supply of any goods, material or service. And is ordinary course of business.

Thus this contracts is not required to be entered with in the register maintained under section 301.