enteries in Contract register u/s 301 of the companies act
Rajeev Chaturvedi
(Querist) 17 June 2009
This query is : Resolved
dear all,
as per section 301 of the companies act 1956 every company shall keep one or more registers in which shall be entered seperately particulars of all contracts or arrangements to which section 297 or section 299 applies.
pls clarify meaning of contract and arrangement and in general business what tpye of transection come into these section
if a company where its director is a director lets out its office to that comany, is there a contract and this should be entered in to contarct register u/s 301 pls give you opinion
regards
rajeev chaturvedi
Manish Singh
(Expert) 17 June 2009
you are covered under section 299 but not in 297.
you must enter the ame in the register.
I) The company while maintaining a register of contracts, companies and firms in which directors
and their associates are interested should not contravene the provisions of Section 163, Section
297, Section 299, Section 301 of The CompaniesAct, 1956. II) Every company must maintain a Register of Contracts, Companies and Firms in which the directors are interested, entering therein contacts
and arrangements in which directors are interested, giving following particulars:-
a) the date of the contract or arrangement;
b) the names of the parties thereto;
c) the principal terms and conditions thereof;
d) in the case of a contract to which section 297
or section 299 (2) applies, the date on which
it was placed before the Board;
e) the names of the firms and bodies corporate
of which a general notice has been given by
the director under section 299 (3); and
f) the names of the directors voting for and
against the contract or arrangement and the
names of those remaining neutral.
2. Application
I) Particulars of every contract or arrangement to
which section 297 or 299 applies must be entered
in the register.
II) Where section 299 is not applicable by virtue of an
exemption, no particulars of such contracts or
arrangements need be entered in the register.
III) But where section 297 is not applicable by virtue
of any exemption, it may nonetheless attract
section 299 and the particulars of such a contract
must be entered in the register.
IV) Thus in case of a contract or arrangement between
two public companies where one or more of the
directors of one company holds/hold not more than
two per cent of the paid-up capital of the other company, such contacts in not to be entered in the register.
V) Particulars of a contract have to be entered in the register
if section 297 is attracted even though section 299 is not
applicable. Mere fact that one of these sections is
exempted from application in a particular case does not
ipso facto lead to an exemption of section 301. [DCA
Circular No. 8/32(299) /69-CL-V dated 3 January 1970].
VI) The requirement in section 301 will apply also to any
contract or arrangement in the bodies corporate of which
general notice has been given by a director pursuant to
section 299(3), whether or not they are contracts or
arrangements requiring the Board's sanction under section
297. [DCA Circular No. 8/2/ (301) /63-PR dated 15
January 1963].
VII) For complying with the requirement of entries in the
register, the contracts coming within the provisions of
sanctions 297 and 299 have to be brought before the
Board and the relevant details entered in the register. No
relaxation in these requirements can be given in view of
the present wording of sections 299 and 301. [DCA
Circular No. Regional Director/4/ (1) /56-Ardated 2
September 1956].
VIII) In the case of contracts falling under section 299, which
do not need to be placed before the Board as a result of
delegation made by the Board or for any other reason, the
details regarding the placing of the matter before the
Board need not be shown in the register. [DCA Circular
No. 9/299/56-PR dated 16 June 1956].
IX) The given time limit must be followed for the purpose of
making entries:-
In the case of a contract or arrangement requiring the
Board's approval Within 7 days (excluding public
holidays) of the meeting of the Board at which the
contract or arrangement is approved. In the case of any
other contract Within 7 days of the receipt at the registered
office of the company of the particulars of such other
contract or arrangement or within 30 days of the date of
such contract or arrangement, whichever is later.
X) The Register must be placed before the Board meeting
held next after the particulars are entered in the register
and all the directors present therein must sign it.
XI) The given contracts must n
Rajeev Chaturvedi
(Querist) 18 June 2009
i will have to enter entrie rent amount which was decided at the time of agreement or rent on monthly basis give me suggestion
Manish Singh
(Expert) 18 June 2009
you have to give full particulars according to 301. put down the full consideration as well as monthly consideration that is under the lease deed.
