Section 297 of Co. Act - Appicability

Under this senario, is the Section 297 applicable: 1) Company A - Paid up capital 110 lakhs 2) Company B - Paid up Capital 1 lakhs The Directors / Share holders / line of business are same. Can any assets / goods be transfered from Company A to Company B ? (The value of the assets is approx 5 lacs and the goods in trade is Rs.1.5 lakhs) I am of the feeling that above transcation cannot take place between both the companies without permission of Central Government. Am I correct?

Both Company A & Company B are private limited companies and having 2 shareholders only. 

Replies (5)

pl specify Co A and Co B is public or private?

BHAVESH

Originally posted by : BHAVESH DOSHI

pl specify Co A and Co B is public or private?

BHAVESH

right ..pls specify.

 

Dear Friend

 

Your quiries is nol clear, please clarify the exact problem. ButSection 297 does not apply to:

 

 1. Giving or taking loans.

2.Contract in respect of immovable property (as it is not 'good' ).{Letter No. 9/4190-CL-X dated 27.03.1990}.

3.Contract between two public Companies.

4.Contract of employment of director or managing or whole time director.[ Circuler No.8/11/75-CL-V dated 27.03.1975]

5.Contract for employment of relative of director.

6.Contract entered into by the company with the dealer on principle to principle basis. [Circuler No. FM 8/297/56-PR dated 02-08-1956]

7. Professional services of the nature given by firms of solicitors and advocates, etc.[circuler No. 8/11/75-CL-V dated 05.06.1975]

8.hiring of office premises on rent as the transaction is in immovable property. [Department Clarification dated 10-09-1990]

 

 

CS Ajay Mishra

Originally posted by : BHAVESH DOSHI

pl specify Co A and Co B is public or private?

BHAVESH
Both the companies A & B Are private limited.

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