Section 301

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 September 2013 if a pvt. ltd. company take a loan from Director but not maintain register under section 301.wrong or right. pls reply me.

Ajay Mishra

Ajay Mishra (Expert)
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17 September 2013 Every company, whether private or public, shall keep a Register and enter therein particulars of all contracts or arrangements to which section 297 or 299 applies including contracts which are exempt under the provisions as under:—
(a) the date of the contract/arrangement;
(b) the name of the parties with whom the contract entered into;
(c) the principal terms and conditions thereof;
(For example when interested contracts covered by section 297 did not need the consent of the Board, the answer against this column may be "For cash at market prices")
(d) the date on which the contracts were placed before the Board;
(e) the names of directors voting in favour or against the contract or arrangement and name of those remaining neutral.

However, the dealing of loan with director will not be taken in to account, because it is exempted under section 297. But Section 301 cover contracts which are also exempted.

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Ankur Garg

Ankur Garg (Expert)
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17 September 2013 For the transaction you have mentioned, entry in the register u/s 301 is not required.

Thanks

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C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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19 September 2013 Since the loan has been given to the company assumed free of interest there is no contract except repayment. The expert is correct that if there is any transaction of loan is no transaction as required u/s 297 or recording u/s 301.

In 301 dealing with the company is to be recorded so that any sales or purchases in excess of the market can be verified