A co. director is in partnership with a restaurant owner and the Company finances whole expenses of the restaurant. Is it under the purview Section 295? But when the Director entered into Partnership agreement the Company was a Private Limited Company and now it is converted into public Ltd. My query is whether this transaction will be treated under section 295 coz company is now a public ltd. company?
Company dosen't want to go for compounding under 621A. Is there any other way to skip from the situation and show the transaction as something else?
Please comment..
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Replies (3)
Since the Company is converted as a Public company, this case will attract Section 295 and CG approval is required. However previous dealings between private limited company and the firm does not require CG approval or compounding. Dealings subsequent to conversion as public company would require CG approval.
Hello,
Agree with Jayashree Mam, sec 295 is not applicable when company holds the status of Pvt. co. and as soon as status changed to public company then on that date onwards sec 295 would be applicable.
Regards
Nidhi
But if a company makes an agreement with the partnership firm when it is a private limited company that it will finance all expenses of firm for the next 10 years then also is this section applicable?
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