The core activity of a company is to publish magazine and organising and managemnent of events.
Holding company has sold papers/gift vouchers/anti virus softwares to its subsidiary company during the year. The same was disclsoed as per AS-18 in the Balance Sheet.
Does the above sale is ultra virus as the above mentioned is not mentioned anywhere in the MOA of the company. Will Sec 297 would also be attracted, both companies are pvt. company
14 December 2010
Though the core activity is publishing magazine,etc. selling papers / gift vouchers, etc. may be considered incidental to the core activity. Again the transaction is with the subsidiary, hence try to fit them into any of the incidental or other objects.
As regards applicability of 297, yes since the companies have common directors the transactions will attract Section 297, 299 and 301.
Agreed with expert that since the Company has common Directors the provisions of section 297 of the Companies Act, 1956 will be applicable.....
Section 297 is not applicable in case of contract between two public Companies...
Moreover if the paid up capital of your company is Rs. 1 Crores or more then the approval of the CG in E-form 24A has to be obtained in addition to the previous approval of the Board of Directors...
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