Central government permission required?

Dear CA Clubbers,

"A" is a Limited company. "B" is a Private Limited company. Here the relatives of Directors of "A" are members of "B". Company "B" has signed contract with "A" for rendering service support works via. clearing & forwarding, transportation, other service related works. (these are examples)

In this case:

1) Does Section 314 applies?

2) Any permission required from Central Government as relatives of director are members of company "B".

3) Further to this any other section will be arrtracted?

Please help

Replies (2)

Section 297 will attract in your case not section 314. Others view solicited.

hello shankar,

As per my understanding,

1.Sec. 314 will not apply.

2. Central Gov. permission is not required.Sec. 297 does not apply to contracts between a company and a private company of which the relative of a director is a member or a director.

in your case directors relatives are the members of the ''B'' company.hence sec. 297 will not apply.

 

 

 

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