sec 297

This query is : Resolved

Abhijit Rane (Querist)
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05 January 2011
hi...

we have received a letter stating that..

you are requested to deposit Rs. 50 lakhs for utilisation of services. this is inrespect to comply with the provisions of section 297 of the companies act.

what action should we take.
the letter issuing comapny is public company. we are private company. what statutory obligations we should comply with. (our paid up cap. is 15 lakhs).
1. do we need to pass ny resolution.?
2. are we depositing money as it is?
3. suggest the course of action that shud be takem by us.

kindly guide.

regards

Abhijit

Jayashree S Iyer

Jayashree S Iyer (Expert)
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05 January 2011 Since you are a private company entering into contract with a public company, section 297 will not be attracted.

However public company will be required to comply with section 297 if both the companies have common directors.

Jayashree S Iyer

Jayashree S Iyer (Expert)
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05 January 2011 However Section 299 with regard to disclosure of interest and 301 with regard to entry in the register of contracts, conmpanies and firms in which directors are interested will be applicable in your case.

Hence the director is required to make disclosure in the Board meeting regarding his interest in the contract which may be noted in the minutes of Board Meeting and necessary entries are to be made in the register maintained u/s.303.

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Abhijit Rane

Abhijit Rane (Querist)
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05 January 2011 thank u so much mam....
so we nid to jst go wid disclosure of interest rite..? so we can deposit money and do our formalities.

Abhijit Rane

Abhijit Rane (Querist)
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05 January 2011 hello mam..
is der a nid to enter in to contract. i mean is der ia nid to enter physical agreements by the two directors/company????

widout the contract we are not suppose to deposit???
please guide..

Jayashree S Iyer

Jayashree S Iyer (Expert)
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05 January 2011 Indian Contract Act validates oral contracts as well. So physical agreements are not mandatory. However company is managed by directors and the managment keeps changing. So for having clear terms and conditions, it is advisable to enter into a written contract.