26 April 2011
There are two companies with common director.1st Company takes up shares in 2nd company so that it becomes its holding company. Shares are acquired in the name of the 1st company by mode of transfer from an individual majority shareholder. My query is does section 297 applies to it. If yes which form has to be filed with CG to take its approval as the paid-up capital of both the companies is more than 1 Cr. do both the companies need to comply?
27 April 2011
Section 297 is applicable where there is a contract for sale or purchase of goods or services. The current transaction pertaining to acquiring shares would therefore fall outside the ambit of this section.
However Section 299 - disclosure of interest by interested directors, Section 300 - interested directors not to participate in the procceedings or vote (if it's a public company) and Section 301 - entry in the register of contracts in which directors are interested, etc. would be applicable.
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