Rajeev (Company Secretary) 12 March 2010

Applicability of Section 294 of Companies Act, 1956

Greetings All Professional Friends,

Hi,

Our Company wants to execute a Dealership Agreement with one Dealer in South India to sell our Automobile Products exculsively in territory i.e. whole South India. Whether the provisions of Section 294 & 294AA shall be applicable on this transaction or not? Kindly through some light on the same in detail.

Thanks in advance.

Rajeev Sharma

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2 Replies

Suresh CSLLM (Service) 12 March 2010

I think, Section 394 is applicable to appointment of sole selling agent in any area for a term exceeding 5 years.

Suresh

Rajeev (Company Secretary) 12 March 2010

Dear Mr. Suresh,

Thanks for your reply.

You are right that Section 294 shall be applicable for the appointment of Sole Selling Agent. But, my query was that whether appointment of our Dealer to sell exclusively our automobile products for a particular area shall be treated as a Sole Selling Agent or not and if yes, than, how we can come out of the preview of Section 294 lawfully without entering into this Section and making compliance of the same.

Thanks in advance.

Rajeev