section 297

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Guest

Guest (Querist)

08 December 2010 Can a private company which has a paid up capital of Rs. 1 crore. and the directors are also directos in other company. and there had been some transactions betwenn both private companies. the other party i.e., othe dealing party is a private company which has a paid up capital of less than 1 crore. and the company has not taken cg approval. kindly tel me the wayout.?????????

udit sharma

udit sharma (Expert)
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08 December 2010 Hi..

Only the Private Company which has a paid capital of Rs.1Crores will have to obtain the previous approval of the Central Government in Form 24A. The other Private Company which has a paid up capital of less than Rs.1 Crores will have to only obtain the approval of the Board of Directors and no approval of the Central Government will have to be obtained by that Private Company.

In case the Company having a paid up capital of Rs.1 Crores or more fails to obatin the previous approval of the Central Government, then the Contract so entered into by the Company shall be void ab initio.

God Bless

Udit Sharma

Jayashree S Iyer

Jayashree S Iyer (Expert)
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09 December 2010 You can file an application for compounding of offence under section 621A.
Only after the compounding you can apply to RD for approval. In many cases compounding application and application for approval are filed simultaneously.

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Ajay Mishra

Ajay Mishra (Expert)
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09 December 2010 Hi

Section 297 does not apply to:

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]

Regards

Guest

Guest (Querist)

16 December 2010 but we had not taken any prior approval. den wat is the option left for us? is it condonation of delay u/s 637B??