hi,
i have following doubts plz clearify....
1. Whether sec 297 and 299 are also apllicable to pvt co.?
2. If pvt co must have to take prior approval of CG if it wants to enter into a agreement to sell goods to director or their relatives, if its paid up cap exceeds 1 crore.
3. Whether a loan given by a company to director is req to be entered in register maintained u/s 301? for both pvt company and public co....
thanx in advance....
Sharad ji,
297. Board's sanction to be required for certain contracts in which particular directors are interested.—(1) 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 or director, shall not enter into any contract with the company—
(a) for the sale, purchase or supply of any goods, materials or services; or
(b) after the commencement of this Act, for underwriting the subscripttion of any shares in, or debentures of, the company.
299. Disclosure of interest by director.—(1) Every director of a company who is in any way, whether directly or indirectly, concerned or interested in a contract or arrangement, or proposed contract or arrangement, entered into or to be entered into, by or on behalf of the company, shall disclose1 the nature of his concern or interest at a meeting of the Board of directors.
301. Register of contracts, companies and firms in which directors are interested.—(1) Every company shall keep one or more registers in which shall be entered separately particulars of all contracts or arrangements to which section 297 or section 299 applies.
1) Remember that 297 & 299 is also applicable to Pvt Co.as insection "of a company" word is used. However, Pvt. Co. is covered in Sec 297 as the word "or a private company of which" is used but not covered in 295, 299 & 372A.
2) 297...............Provided that in the case of a company having a paid-up share capital of not less than rupees one crore, no such contract shall be entered into except with the previous approval of the Central Government.
Otherwise penalty under sec 629A will apply....i.e. upto Rs.5000+500/day.
3) yes 301 apply for both pvt company and public co....except a contract upto Rs. 1000.
CAclubindia
