Neha Agarwal (student) 15 December 2011
hi!!
Please solve my query
One pvt. company having a director common with another pvt. company wants to engagd or enter into the contract, agreement with such pvt company. Wil section 297 attracts since confusion lies that both are pvt. company??
Both co. have a paid up capital more than 1 crore
Please provide format of Board Resolution and format of contract if the same applies?
sanjay kumar (BE/ LLM in Corporate Laws) 16 December 2011
Section 297 is very clear. No company(which is regsitered under the Company's Act,1956-no matter private or public limited) can enter into a contract with another company for sale, purcahse, supply of goods materials or services where a Director or his relative is also a Director or a relative of the Director of the other company unless :-
(a) In case the paid up capital of the first company is less than Rs1.00 Crore, the contract is to be approved by the BOD and (b) In case the paid-up capital of the first company is more than Rs.1.00 Crore, it is to be approved by the Central Government. The basis of your confusion is not clear.
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