30 September 2011
A closely held company where directors and shareholders are same persons wants to enter into contract u/s 297 with a group compnay whose directors & shareholders r same persons and are the relatives of the former co. No director or shareholder is common in both the companies but are relatives of each other...In this case, all are said to be as Interested directors, then whether they can participate in the process of passing of board resolution for entering into the said contract...
30 September 2011
A Director who is directly or indirectly interested in a contract or arrangement shall not participate in the discussion on any such contract or arrangement & vote thereon.
However please note that if the director is not holding more than 2% of the paid-up share capital of other public company, he can't be termed as interested director.
Section 300 is not applicable to 1. a private company which is neither a subsidiary nor a holding company of a public company
2. a private company which is subsidiary of a public company, when it enters into a contract with its holding company
but i meant to ask that in this case all directors are interested..so there is no qourum of disinterested directors...so how to pass the the board resolutio
30 September 2011
But i dont find any sense here. SS1 prohibits interested directors from participating in passing the resolution. If we approach shareholders to pass the resolution, they are same persons who are directors.
To appoint Additional director for just passing the resolution doesnt seem much practical. Kinldy confirm is there any provision allowing intereste ddirectors to vote.
CAclubindia
