18 November 2014
Section 297 of Co’s Act,1956 was not applicable on related party transactions/agreement between two public limited companies. Based on that 2 companies entered into an agreement in the year 2012 which is valid till year 2018. Now is it required under new Co Act,2013 to take Board Approval or Members Approval for the agreement which is a related party transaction/arrangement . MCA General circular no.30/2014 dated 17th July 2014 says that if contract are entered after making necessary compliances u/s 297 of Co. Act, 1956 which already came into effect before the commencement of Section 188 of Co. Act,2013 will not require fresh approval under the said Section 188 till the expiry of the original term of such contracts. But in the present case no compliances were done under Section 297 of Co Act, 1956 as it was not applicable between 2 public ltd Companies.
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