Section 297 and 314

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UMA NIPUN LODHA (Querist)
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10 February 2012 In a Private Company dealing in hotel business having paid up capital more than 1 Cr, the Board proposes to enter into a contract with the wife of one of the Directors.

What sections will be attracted? Is it Section 297 and 314 or something else? As per my knowledge the COmpany needs to apply to RD under Section 297 and pass Special resolution under Section 314 and take approval of CG.

Can anyone tell me the correct procedure for doing the needful.

Also if any one can tell me the difference between Section 314 (1) and Section 314 (1B)

Jiten Gupta

Jiten Gupta (Expert)
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11 February 2012 Section 297 will be followed. Here a contract is entered by Company with relative (Wife) of one of Director.. So you can follow the simplified procedure U/S 297. Call a Board Meeting. Make the complete disclosure of everything into contract, its Arm length Price etc. Call EGM and Pass SR. File E-Form 23 and later E-Form 24A.