A Pvt. Ltd. has 2 Directors (A & B). Company wants to sell Building to Mr.A, transaction value is less than 10% of Net-Worth as specified in Rules relating to Section 188, moreover Section 188 applies to the company as borrowings are more than twice of Paid up capital. Following are queries in my mind which I hope CCI Members can solve :-
1. Since transaction value is less than 10%, according to Section 188 only BR is required. No need of resolution by the company. But how a single director Mr. B can pass BR for sale of building by the Company to Mr.B?
2. If not BR, some might say that Company Resolution will be reqd in this case. If Co.'s resolution is reqd by calling EGM, then HOW Board will call EGM? Can Mr. A and Mr. B both jointly call the EGM (can an interested director along with un-interested director call EGM)? If no, what is possible solution in this case, as Company has 7 shareholders who can pass resolution in favor but how EGM will be called by Board to make the company pass that resolution? Company donot want to add third director.
Thank You in Advance :)
CAclubindia
