Companies Act_Practicle Problems_7

X Pvt. ltd is partner is XY & co a partnership firm. Other Partner is Mr. Y. Mr. Y is also a Director in X Pvt. Ltd. The profit & loss sharing is 99.999% by X Pvt. Ltd and 0.001% by Y. Paid up capital of X Pvt. Ltd is 5 crores. It proposes to buy raw material of Rs. 2,00,000 per month from XY & Co on credit.

a) Whether Government approval would be required to be obtained by X. Pvt. Ltd?

b) Can company argue that XY & Co is nothing but only a different form of business organization created only for tax planning purposes?

c) Will the answer be different if Mr. Y is not a director of X Pvt. Ltd?

Companies Act_Practicle Problems_6

X a director of a Public limited company with a paid up capital of Rs 5 Crores has provided unsecured loan of Rs. 150 Lakhs to the company. X does not have a license of Money lending but is carrying on the business of money lending regularly. Whether ‘supply of money’ is ‘supply of service’ as contemplated by section 297? Whether this transaction will attract section 297? Whether answer would be different if X has a license as Money lender? Whether lending of money by an NBFC which is private Limited company in which X is a director will attract section 297?

Companies Act_Practicle Problems_5

X Pvt. Ltd is a private limited company registered in India in which P Inc. (American Company) holds 45 % shares and Q Inc ( Another American Company ) holds 45% shares. Y Pvt. Ltd is another Indian company in which both P Inc & Q Inc holds 30 % shares each. P & Q have no relations with each other. None of directors of X Pvt. Ltd & Y Pvt. Ltd are common. Whether X Pvt. Ltd and Y Pvt. Ltd has any relation with each other? Can X Pvt. Ltd. transact with Y Pvt. ltd without attracting any provisions of “Related Party Transaction” and section 297 , 299 etc?