Hi,
First of all happy new year to all.
Whether Section 297 will be applicable to a transaction for supply of services between a public company and its subsidiary which is a private company.
Rajeev Nayak
Rajeev kumar Nayak (ACS) (283 Points)
01 January 2011Hi,
First of all happy new year to all.
Whether Section 297 will be applicable to a transaction for supply of services between a public company and its subsidiary which is a private company.
Rajeev Nayak
J. Manivannan
(Advocate & IP)
(242 Points)
Replied 01 January 2011
Dear Rajeev
Section 297 provides certain transactions between two public companies are exempted but does not provide that exemption extent to private company which is subsidiary of public company. Thus, your transaction is attracted the section 297.
We will wait for expert opinion on this.
Rajeev kumar Nayak
(ACS)
(283 Points)
Replied 02 January 2011
Thank u all for reply.
But as per section 3 (1)(iv), private co. which is a subsidiary of public co. is public company and as per sec. 297 transaction between 2 public co. is not fall within sec. 297.
Please give ur view on this point and there is any clarification etc. on this please provide.
Rajeev Nayak
Jayashree S Iyer
(Company Secretary)
(3224 Points)
Replied 03 January 2011
Yes. A private company which is subsidiary of a public company is a public company as per Section 3(i)(iv). Hence Section 297 does not apply. However please ensure that the subsidiary private company is treated as a public company for all other compliance purposes under the Companies Act viz., Section 295, 309, 310, 311,292A with regard to audit committee, etc. which are not applicable to private company will be applicable in respect of a private company which is a subsidiary of a public company.
ankit jain
(CS trainee)
(152 Points)
Replied 03 January 2011
I completely agree with Jayashree, that section 297 will not be applicable here but is it mandatory to comply with all the compliances which is mentioned by Ms. Jayashree..???
Bcoz section says that transaction between two public company is exempted and subsidiary of a public company is also a public company according to sec 3(1)(iv). So, i think there is no questions of any compliances, if the pvt. co. is a subsidiary of a public co. then it will be considered a public co.
Any further opinion is highly appreciated
Thanks in advance
Kalpesh Chauhan,
(Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))
(8311 Points)
Replied 03 January 2011
Thanks to all
CAclubindia
