Applicability of section 297????????

Hi

Apart from the consent of the Board, previous approval of the Central Government is also required where the paid up capital of the Company isOne Crore or more.

The Application for approval shall be made to the concerned Regional Director in Form No. 24A prescribed under Companies (Central Government’s) General Rules & Forms, 1956 along with a certified copy of the contract and / or relevant papers and Demand Draft for the fees payable under the Companies (Fees on Applications Rules, 1968).

Further, this provision does not have any impact on contacts entered into prior to the date of crossing of the limit ofOne Crore, and subsisting after that date.

In your case, Compounding of offence will not arise under Section 297 of the Companies Act, 1956 and the company should submit previous contract along with form 24A.

Hi Puja,

Please ignore demand Draft for the fees payable under the Companies (Fees on Applications Rules, 1968).

thanks Kumar,

Pls clarify do you mean Board resolution passed  before the paid up capital crossed 1 crore by 'previous contract' as suggested by you above.

Hi Puja,

Board resolution should have been passed before crossing paid up capital of Rs. 1 crore.

As per recent circular No. 52/2011 dated 25th July, 2011, the Ministry has decided to simplify the procedures and to give approval online, if the proposed contract has been approved by the shareholders by way of special resolutions in a general meeting. Your Company can obtain online approval as it is applicable from 24th September 2011.