Sec.297 of the companies act & trademark

Dear All,

A substantial interest holder and a Director of a Pvt. Ltd.Company (paid up capital more than1 crore)  transferred a Trademark to the Company for Rupee One only. Market value of the Trademark was about moe than a billion rupees. The director did not mind because he owned more than 90% shares of the company.

No prior approval of Central Govt. was obtained because it was thought that the "trademark" was neither "goods" nor "merchandise", and certainly not a service. Further, in effect it was as good as a gift.

Whether there is any violation of section 297 of the Companies Act. I recollect having seen an Article by Mr Ankur Garg , but now I am not able to trace that article. But that article did not have support of any judicial pronouncement.

Can anybody help me.

Ashok Garg

Corporate Commercial & IP Lawyer


Dear Mr. Ashok,

Please check the below link




IP & Business Lawyer

IP Lex Global Services


Mob: 0091-09902007635 / 34


Sorry Mr Nagraj

The link leads to a very general reply. I am aware of them. I have asked a specific question- in substance which means that whether a Trademark is a "merchandise' or "goods" at all to attract the provisions of Proviso to section 297(1) of the companies act.



Ashok Garg




Dear Mr. Garg,

Sale of trademark is akin to sale of goods, please refer this Madras High Court Judgment SPS Jayam and Company reported in (2004)3MLJ74


Dear Sir,

The judgment can also be seen by visiting the link below


It attracts section 297 however as the value of transaction is below Rs. 5000, no prior approval is required in this case.



Dear all

Can anyone guide me that whether assignment/transfer of Trade mark between group company attracts section 297 of the Companies Act  or not ?

Is it necessary to go for valuation at the time of transfer/assignment ?

Can we transfer the TM at any value between the group Company ?

Also whether trade mark will fall under the definition of goods or not ?

Pls guide me on the above.




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