Section 297

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udit sharma (Querist)
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06 December 2010 Hi...

Will section 297 of the Companies Act, 1956 have to be complied with in case a Public Company proposes to enter into a contract for purchase, sale,supply of goods, materials or services with a Sole Proprietorship firm of which the Director of the Company/or his relative is a proprietor??????

Section 297 covers a firm in which the Director of the Company/or his relative is a partner or any partner of such firm but whether proprietorship firm is covered??????

Aditya Maheshwari

Aditya Maheshwari (Expert)
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06 December 2010 If you see in realty the contract would be between the director and the relative only as the proprietor is the relative and hence it will covever proprietorship also.

Jayashree S Iyer

Jayashree S Iyer (Expert)
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07 December 2010 Hi Udit,

Proprietorship firm is nothing but the sole proprietor himself.

Thus when a director of the Company is the proprietor of the proprietorship firm he is covered by the words "a director of the company ......."

Hence Section 297 has to be complied with in the case referred to hereunder.

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