02 February 2012
suppose that a contract is to be entered into between 2 pvt companies which attracts the provisions of section 297 of the companies act.
is it required by both the companies to get approval seperately from the central government?
the simplified procedure for 297 applications as in mca general circular 52/2011 mandates the approval of shareholders in general meeting by way of special resolution. but is it required to get the approval of shareholders of both the companies for 297 contracts?
if yes, where is it mentioned?
i consider that the approval is necessary for any one of the companies, as the govt approval is given for the contract as such in which both the companies will be covered automatically.
03 February 2012
As per my view both companies are required to take approval of Shareholders and CG.
Simplified procedure requires approval of shareholders of company. It means legislatures are of view that its members of company who should give their consent and both companies are separate entity, so approval is required.
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