Private limited company registration

Appointment of a private company as sole selling agent

A solicitor was a director of a public limited company for which he was a solicitor. The solicitor was also interested in a private limited company of the same group which was appointed as the sole selling agent of the public limited company. It was held that the vote of the interested director in the appointment of the sole selling agent was void and as there was no majority in favor of the resolution, no valid resolution was passed at the board meeting.

Applicability to a private limited company

Section 297 requiring prior consent of board on certain contracts, section 299 requiring disclosure of interest by directors and section 301 requiring maintenance of register are applicable to a private limited company also. But under section 300 an interested director on any item may take part on the proceedings and vote at a board meeting in a pure private limited company.

Register of interested contracts

Every company, private limited company or public limited company shall keep a register and enter therein particulars of all contracts or arrangements to which section 297 or 299 applies including contracts which are exempt under the provisions as under :

(a) Date of contract/arrangement.

(b) Party with whom entered into

(c) Principal terms and conditions

(d) The date on which the contracts were placed before the board

(e) Names of directors voting in favor or against or remaining neutral.

The register shall be placed before the succeeding board meeting and shall be signed by the directors present at that meeting.

Inspection of register

A member of company may inspect the register free of charge and either take extracts or copies may be asked for on the payment of same as prescribed in section 163.

Matters which shall always be considered at meeting of  the board

As there shall be at least four board meetings in a year and as in fact the boards of many leading companies meet more often, it is an unwritten rule that all matters are submitted to the board for consideration and approval unless some matters are delegated by the board to any director or managing director or to a committee of directors. But there are specific provisions in the act that certain matters, which are importance to the company. It shall always be considered at a meeting of the board and approval accorded by resolution.

Matters to be transacted at board meetings by resolution

The following matters shall always be considered at board meetings and are approved by means of resolutions.

  1. Making calls on shareholders in respect of money remaining uncalled on their shares.
  2. Issue of debentures
  3. Borrowing moneys otherwise than by issue of debentures
  4. Investing funds of the company
  5. Making loans to others

Items out of above always requiring board meeting approval

The first three items, namely, making calls on shareholders, authorizing buy-back and issue of debentures,  shall always be transacted at a board meeting by resolutions. The private company may also have an meeting with the directors.

Safeguard in delegation

As the board of directors is overall responsible for the affairs of a company, the board may find it desirable to direct the delegatee to furnish periodical reports to the board as to the exercise of the power delegated.

Act of delegating above powers only at board meeting

Where any of or all the powers – items 4,5 and 6 above are proposed to be delegated. The delegation shall  be done at a board meeting by resolution. In this connection, the term ” principal officer” is not defined in the act and therefore, it is desirable to make the delegation, if any, to others specified.

For registering a company in Coimbatore visit here

Registering a company in Salem visit here

 

You may also like...

Leave a Reply