SECTION 297 - URGENT !

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Finance
345 Points Joined December 2009

Hello members

A private co makes allotment of equity shares to its promoter and foreign co against the technical services. please tell me does it attract section 297. there are common directors in the private co and foreign company.

whats the difference if this private co was a public co.?? what is procedure to be followed for the same ???

regards

neeta

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On 20 January 2010 at 11:35 Report
Replies (6)
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Mentor at SHAYVIDZ Academy
3756 Points Joined September 2007

Dear Neeta,

 

In my opinion, sec 297 will not be applicable in the above case..

 

Sec297 applicable on in case of SPECIFIED CONTRACT between SPECIFIED PERSOS..

 

Sec297 says : Specified contract between -

Party 1 : Public company or private company

Party 2 : (i) Director  (ii) Relative of Director (iii) Firm in which director or relative of director is partner (iv) any other partner in such firm (v) A PVT COMPANY of which the director is a member or director.

  

Foreign company is not covered in the list of SPECIFIED PERSON for the purpose of Sec 297..

So i think Sec 297 will not be applicable in ur case..

 

Opinion of other members of CACLUB also be considered..

 

Adarsh

 

1 Reply
On 20 January 2010 at 12:55
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Company Secretary in Practice
165 Points Joined November 2007

Dear Neeta,

 

Adarsh is right . Sec. 297 is not applicable in your case.

1 Reply
On 20 January 2010 at 15:11
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Finance
345 Points Joined December 2009

 

Thank you both...

regards

neeta

1 Reply
On 22 January 2010 at 15:35
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Company Secretary
74352 Points Joined March 2009

 

Dear Neeta
 
Section 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]
 
Regards
 
Ajay
 
 
 
2 Reply
On 23 January 2010 at 10:26
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Mentor at SHAYVIDZ Academy
3756 Points Joined September 2007
Originally posted by : Neeta

Thank you both...
regards
neeta

 

U Always Welcome..

1 Reply
On 25 January 2010 at 23:13
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Asst.Company Secretary(trainee)
21 Points Joined July 2010

Hello  Members,

Can anybody send me a specimen board resolution as required before entering into any contract U/S 297 of the Companies Act,1956?

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On 23 July 2010 at 12:29


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