Anshul (CA Final Aspirant) 04 November 2010
In your case, the Sec. 297(2)(a)principle of cash at prevailing market price is not applicable as it is only for sale of goods or material n not services . Services part is covered under Sec. 297(2)(b) which says for regular trade & Rs. 5000 agreegate limit.
Since, the paid up capital is more than 1 crore thus as per Sec. 297 , prior approval of CG will be required.
As regard to Quorum , Sec. 300 specifically excludes Private companies. It means that even interested directors can constitute a vaild quorum for board meeting.
I hope this shall be helpful
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Jayashree S Iyer (Company Secretary) 07 December 2010
Central Government approval is required as Sub-section 2(a) of section 297 of the Companies Act, 1956 excludes only the purchase or sale of the goods and materials to the company at prevailing market prices. Services are not covered and hence do not fall under exclusion.
As regards quorum, yours being a private company section 300 is not applicable and the interested director will be counted for quorum and can also participate in voting.
ankit jain (CS trainee) 08 December 2010
You need to take prior CG approval for such transaction. Quoram for the Board meeting can be shown in the same manner as you were showing because section 300 will not be applicable to a pvt. co. So, the interested director of a pvt. co. can take part in the discussion.
Please correct me if i am wrong.