Application to Regional director

The Regional Director
Northern Region
Company Law Board, PDIL Bhawan
Ground Floor, A-14, Sector 1
Noida 201301, Uttar Pradesh



Dear Sir,

Re: (the “Company”)
Application for approval under section 297 of the Companies Act, 1956 (“Act”)

The purpose of this application is to seek approval from your Hon’ble office for entering into a contract of sale/ supply of goods to ________________ (India) Limited.


1. Background

· The Company was incorporated on ______________ and is a subsidiary of _____________. The Company is engaged in the business of, among other activities, wholesale trading of ______________ ___________.

· _______ is an Indian listed company, primarily engaged in the business of manufacturing wide range of _______________________ etc.

· The goods traded by the Company is an important input for manufacturing ___________ range of products ______________ Accordingly, the Company and _____________have agreed to enter into a “Sale-Purchase Agreement” for supply of___________ by the Company to IRSIL.

· Mr _________, a director on the Board of the Company is also a director on the Board of ___________.

· Section 297 of the Act regulates the transactions between two companies having common director and requires prior approval of the Board of Directors/ Government for entering into certain specified contracts/ transactions.

2. Corporate law norms

Sub-section (1) of section 297 of the Act provides the following:

“Except with the consent of the Board of directors of a company, a director of the company or his relative, a firm in which such a director or relative is a partner, any other partner in such a firm, or a private company of which the director is a member or director, shall not enter into any contract with the company—

(a) for the sale, purchase or supply of any goods, materials or services; or
(b) after the commencement of this Act, for underwriting the subscription of any shares in, or debentures of, the company:
Provided that in the case of a company having a paid-up share capital of not less than rupees one crore, no such contract shall be entered into except with the previous approval of the Central Government.”

In view of the above corporate law norms, prior approval of the Board of Directors/ Government would be required for entering into a contract for sale, purchase or supply of goods by a company (public company or a private company) with a private company in case there are common directors.


3. Approval required

In light of the above background and corporate law requirements, the Company seeks permission of your honourable office for entering into a contract of sale/ supply of PTA to IRSIL.

For the purpose of processing this application, we have enclosed the following documents for your reference:

· Duly filled-up Form 24A;

· Memorandum and Articles of Association of the Company;

· The copy of “Sale-Purchase Agreement” proposed to be entered into between the Company and _______;

· A list of the names, addresses and occupations of the directors of the Company together with the names of companies in which the directors are director with a description of the positions held;


· Copy of the board resolution authorizing the directors to enter into “Sale Purchase Agreement” with _____.

We would be grateful if our application could be considered favorably.

We would be pleased to provide you with any other information or clarification that you may have in connection with the above.


Yours sincerely,