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Applicability of section 372A, 297, 299, 300 and 301

suchita kothari (service) (113 Points)

05 January 2011

Hi to all,

A pvt Company which is a holding of public company grants loan to the public company. Can u please confirm the applicability of section 372A, 299, 300, 301 and 297 and 295?

Thanks in advance

waiting for ur reply

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10 Replies

nidhigoel89 (Company Secretary ) (594 Points)
Replied 05 January 2011

Hello!

As per my view....

A pvt. co which is a holding of a public co will remain the status of a pvt. co. and as per which

Sec 372A.. not applicable

299..Applicable

300....nt applicable

301....applicable

297....on prime facie nt applicable rest depends on a situation

295.... Nt applicable.

Any Further suggestion.....

Regards

Nidhi

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udit sharma (Company Secretary) (2303 Points)
Replied 05 January 2011

Hi..

Agreed with expert Nidhi, except:

As per the provisions of section 299(6), provisions of section 299 shall not be applicable in case of contract, agreement, arrangement to be entered into between two companies, if the Director of the lending company either singly or jointly with other Directors is not holding more than 2% of the paid up capital of the borrowing company. Hence, in my view section 299 shall not be applicable as per the facts of the case provided by you.

As the provisions of section 297 & 299 are not applicable, provisions of section 301 will also be not applicable.

Regards

CS Udit Sharma

udit sharma (Company Secretary) (2303 Points)
Replied 05 January 2011

Moreover, the provisions of section 300 are applicable to a Private Company which is a Holding Company of a Public Company.

But in my opinon in the given case, provisions of section 300 will not be applicable.

suchita kothari (service) (113 Points)
Replied 05 January 2011

thanks to all for replying!

Mr. Udit,

In my case the directors of the lending co holds more than 2% of the puc of the borrowing company. so whether 299 will be applicable or not?

Moreover as you rightly pointed that for a pvt co which is aholding company, section 300 is applicable, then how it will not be applicable in my case.

please reply

udit sharma (Company Secretary) (2303 Points)
Replied 05 January 2011

Section 299 will be applicable and the provisions of section 301 of the Companies Act, 1956 will have to be complied with.

At the BM held to consider this item, the interested Directors shall disclose to the Board that they are interested in this item but shall be entitled to participate in the discussion and shall be entitled to vote as well as shall be counted for the purpose of forming a quorum.

I was wrong in my earlier reply and the provisions of section 300 are not applicable in case of a Private Company which is a subsidiary or a Holding Company of a Public Company.

The provisions of section 300 will not be applicable in your case.

Regards

CS Udit Sharma

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suchita kothari (service) (113 Points)
Replied 05 January 2011

Dear Mr. Udit,

as per section 300(2) (a), the provision will be not be applicable for a pvt com which is neither a subsidiary nor a holding of a public company. In my case , pvt co is holding of public company, so in that case it is applicable na?

Please make me correct if i m wrong.

and second thing the pvt company has only two director then how the resolution for the contract will be passed under this circumstances?

pls reply

Jayashree S Iyer (Company Secretary) (3224 Points)
Replied 05 January 2011

Yes Suchita, you are right. Yours (private company) being a holding company of a public company Section 300(1) is applicable.

If only 2 directors are available and one is an interested director, the way out is get it approved in the general meeting.

suchita kothari (service) (113 Points)
Replied 05 January 2011

Thanks Jayashree.

i agree with your suggestion.

Thanks Udit and Nidhi

Santhosh Poojary (SIEMPRE AHÍ PARA TI) (15607 Points)
Replied 05 January 2011

THANKS TO ALL

Pawan Kr. Tomar (CA) (169 Points)
Replied 06 January 2011

Originally posted by : Jayashree S Iyer
	Yes Suchita, you are right. Yours (private company) being a holding company of a public company Section 300(1) is applicable. If only 2 directors are available and one is an interested director, the way out is get it approved in the general meeting.