Applicability of Sec 297 vis a vis 299

With reference to section 299(6), it is the collective responsibility of all directors to disclose the nature of their interest, and if their holding together exceeds 2 % of the paid up capital of the other company, any contract oe aarrangement with that other company will come within the perview of this section. {Ciecular No. 8/16/061-PR dated 19^th May, 1961}

As per the above circular please check that Mr. K and other directors together hold more than 2% of paid-up capital of Company A.

Regards

Section 297 does not apply to:

 1. Giving or taking loans.

2.Contract in respect of immovable property (as it is not 'good' ).{Letter No. 9/4190-CL-X dated 27.03.1990}.

3.Contract between two public Companies.

4.Contract of employment of director or managing or whole time director.[ Circuler No.8/11/75-CL-V dated 27.03.1975]

5.Contract for employment of relative of director.

6.Contract entered into by the company with the dealer on principle to principle basis. [Circuler No. FM 8/297/56-PR dated 02-08-1956]

7. Professional services of the nature given by firms of solicitors and advocates, etc.[circuler No. 8/11/75-CL-V dated 05.06.1975]

8.hiring of office premises on rent as the transaction is in immovable property. [Department Clarification dated 10-09-1990]