06 September 2013
A pvt compnay is a holding company of a public company. Now holding company is advancing loan to the said subsidiary public company. Directors are same in both the companies.Whether sec 299 will be attracted?
Every director of a company, who is in any way, whether directly or indirectly, concerned or interested in a contract or arrangement, or proposed contract or arrangement, entered into or to be entered into, by or on behalf of the company, shall disclose the nature of his concern or interest at a meeting of the Board of directors. Section 299(2) relates to the time of disclosure, which may be described as under, depending upon the status of contract.
The section is applicable to all companies. Therefore, all directors are required to give the notice of disclosure, in writing. It is equally applicable to the alternate director including the directors appointed by the financial institutions and the Central Government under section 408 of the Act.
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