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]
31 October 2013
In your case, if both company are public limited companies or covered under the above case then section 297 will not apply otherwise it will be applicable.
01 November 2013
There are 2 private companies and one of them is the wholly owned subsidiary of the other. The holding company charges technical fee from the subsidiary company. In both the companies one of the shareholder is common and out of 4 directors in subsidiary company 3 are also directors in holding company. The paid up capital of both subsidiary and holding is Rs 1 crore and more. Is there any provision which can avoid CG approval.
01 November 2013
If you are charging technical fee which is at fair market value then such section will not apply, otherwise yes section 297 becomes applicable on your both company.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
29 November 2013
Hello Sir thank you for the reply, can you quote relevant provision as to why technical fee would not come under the purview of section 297?
03 December 2013
Hello Sir thank you for the reply, can you quote relevant provision as to why technical fee would not come under the purview of section 297?