10 December 2011
Regarding Sale of an undertaking I would advise you to go through with section 293(1)(a) of the Companies Act, 1956.
The Section contemplates restrictions on the powers of the Board of Directors. As per section 293(1)(a) the Board can act only with consent of the members in general meeting. Therefore, where the question arises as to sale of an undertaking of the Company, the Board has the power to dispose off the undertaking, but with the consent of the general meeting.
It is relevant to note here that the Section is applicable only to Public Companies and to Private Companies which are subsidiaries of Public Companies.
A Private Limited Company is allowed to dispose its undertaking without shareholders approval just by passing a board resolution.
STOCK EXCHANGE NOTICE
With reference to clause 36 it is a material decision so you should promptly intimate the same to the STX immediately passing the resolution in the board meeting.
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