Section 192 of Companies Act 2013 seeks to provide the manner in respect of regulation of arrangements between a company and its directors in regard to the acquisition of assets for consideration other than cash.
This clause furnishes that such arrangements shall require prior approval of members of the company by a resolution in general meeting and if the director or the connected person is a director of the holding company, then approval is required to be obtained by passing of special resolution in the general meeting of the holding company.
So according to this section the prior approval by the shareholders of the company or holding company will be required in the following scenario:If,
Notice of the meeting
According to the Section 192(2), Notice for approval of the resolution by holding company or a company in general meetings along with the value of assets included in arrangements shall involve the particulars of the arrangements, which is duly calculated by a registered valuer.
Entered in contravention of the provision
The Section 192(3) says that any arrangement comes in by holding company or a company in contravention of these provisions shall be reversible at the end of the company.
(a) the restitution of any money or other consideration which is the subjectmatterof arrangement is no longer possible and the company has been indemnifiedby any other person for any loss or damage caused to it; or.
(b) any rights obtain genuine for value and without notice of the contravention of the provision of this section by any other person.
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Posted by: CA Neetu Saini