Regarding Sale of an undertaking I would advise you to go through with section 293(1)(a) of the Companies Act, 1956.
The Section contemplates restrictions on the powers of the Board of Directors. As per section 293(1)(a) the Board can act only with consent of the members in general meeting. Therefore, where the question arises as to sale of an undertaking of the Company, the Board has the power to dispose off the undertaking, but with the consent of the general meeting.
It is relevant to note here that the Section is applicable only to Public Companies and to Private Companies which are subsidiaries of Public Companies.
A Private Limited Company is allowed to dispose its undertaking without shareholders approval just by passing a board resolution.
STOCK EXCHANGE NOTICE
For a company listed with Stock Exchange compliance with Listing Agreement is must. With reference to clause 36 it is a material decision so you should promptly intimate the same to the STX immediately passing the resolution in the board meeting.
Find below the extract from clause 36 of Listing Agreement:
36. Apart from complying with all specific requirements as above, the Issuer will intimate to the Stock Exchanges, where the company is listed immediately of events such as strikes, lock outs, closure on account of power cuts, etc. and all events which will have a bearing on the performance / operations of the company as well as price sensitive information both at the time of occurrence of the event and subsequently after the cessation of the event in order to enable the security holders and the public to appraise the position of the Issuer and to avoid the establishment of a false market in its securities. The material events may be events such as:
- Change in the general character or nature of business
Without prejudice to the generality of Clause 29 of the Listing Agreement the Issuer will promptly notify the Exchange of any material change in the general character or nature of its business where such change is brought about by the Issuer entering into or proposing to enter into any arrangement for technical, manufacturing, marketing or financial tie-up or by reason of the Issuer, selling or disposing of or agreeing to sell or dispose of any unit or division or by the Issuer, enlarging, restricting or closing the operations of any unit or division or proposing to enlarge, restrict or close the operations of any unit or division or otherwise.
RG
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