04 April 2011
Whether the provisions of section 297 of the Companies Act, 1956 will be applicable in case of a transcation between a Public Limited Company and a Private Company which is a subsidiary of the same Public Company.
As per the amended definition of a Public Company, a Public Company inlcudes a Private Company which is a subsidiary of a Public Company.
Hence, in the above case, the transaction is between two Public Limited Companies and would be exempt from the provisions of Section 297 of the Companies Act, 1956. Am I Correct in my interpretation?????? Experts ur views please!
04 April 2011
Yes, your interpretation is correct. A private company which is a subsidiary of a company which is not a private company, is a public company as per Section 3(1)(iv)(c) of the Companies Act, 1956.
Hence the provisions of Section 297 will not be applicable in the case referred to in your query.
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