Board to meet once in every three months.
Boards sanction to be required for certain contracts in which particular directors are interested
for the sale, purchase or supply of any goods, materials or services
for underwriting the subscription of any shares in, or debentures of, the company.
In case of a company having paid up share capital of at least Rs. 1 crore, no such contract can be entered into by the company without the previous approval of the Central Government.
However, the above provision will not affect:-
the purchase of goods and materials from the company or the sale of goods and materials to the company by any director, relative, firm, partner or private company as aforesaid for cash at prevailing market prices.
any contract or contracts between the company on one side and any such director, relative, firm, partner or private company on the other for the sale, purchase or supply of any goods, materials or services in which either the company, or the director, firm, partner of private company, as the case may be regularly, trades or does business, provided that such contract or contracts do not relate to goods and materials the value of which or services, the cost of which exceeds five thousand rupees in the aggregate in any calendar year comprised in the period of the contract or contracts
in the case or a banking or insurance company, any transaction in the ordinary course of business of such company with any director, relative, firm, partner or private company.
A director, relative, firm, partner or private company may enter into a contract with the company for the sale, purchase or supply of any goods, materials or services even if the value exceeds Rs. 5000/- and the approval of the Board is not obtained in cases of urgent necessity. However, approval of the Board must be obtained at a meeting within 3 months of the date on which the contract was entered into.
Every consent of the Board under these provisions must be by a resolution passed at a meeting of the Board and either before the contract was entered into, or within 3 months of the date on which it was entered into.
Where such consent is not accorded to the contract, the contract shall be voidable at the option of the Board Procedure, etc, where director interested