Can terminating a land development agreement amount to disposing off a substantial part of the undertaking of a business u/s 180 of the Companies Act, 2013?
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Section 180 of companies act, 2013
Replies (8)
No it is not
First of all, sec 180 is not applicable to private ltd companies
Secondly, it depends on whether the investment is more than 20℅ and whether it was shown as capital wip or was a mere agreement ?
AS PER SECTION 180(1)(A)- UNDERTAKING MEANS THE UNDERTAKING IN WHICH INVESTMENT OF THE COMPANY EXCEEDS 20% OF THE NET WORTH AS PER THE AUDITED BALANCE SHEET OF THE PREVIOUS YEAR OR AN UNDERTAKING WHICH GENERATES 20% OF THE TOTAL INCOME OF THE COMPANY DURING THE PRIVIOS FINANCIAL YEAR
SUBSTAINTIALLY THE WHOLE OF THE UNDERTAKING MEANS 20% OR MORE OF THE VALUE OF THE UNDERTAKING AS PER THE AUDITED BALANCE SHEET OF THE PREECEDING FINANCIAL YEAR
That was 293 under the old Companies Act. Section 180 under the new companies act is applicable to all conpanies.
Please refer Sl No. 12 of MCA notification GSR(E) dated 5th June, 2015. The section is not applicable to private companies.
U r terminating the Agreement or Executing ?
The company is terminating the agreement
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