Meaning of Undertaking as per Companies Act, 2013

[Sakshi]

Dear Learned Friends,

Pls share your opinion on the definition of "Undertaking" as per Companies Act, 2013. Does "undertaking" includes investment in shares of other bodies corporate of more than 20% of the net worth of the company.

A Private ltd company has made an investment of Rs. 50 Crores (approx.) in the shares of other companies which results to investment of an amount exceeding 20 per cent of the net worth of the company. Now if the company wants to sell the entire investment than whether it should be construed as "sale of undertaking" as per the requirements of Section 180(1)(a) of the CA, 2013.

Secondly, if it is coming within the purview of Section 180(1)(a) of CA, 2013, than does it require prior special resolution or consent of shareholders through special resolution can be obtained/ratification of the aforesaid sale can be done in the next AGM to be held after the investment has been sold.

Regards,

Sakshi

[kanika sharma]

Dear Sakshi, 

In my opinion , if  this transaction takes place after 12.09.2013 then you need to pass special resolution . And 

PFA circular of mca if it takes effect before 12.09.2013 then ordinary resolution would suffice.

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Thanks & Regards

 

 CS Kanika 

 SPN LEGAL

 ADVOCATES

 DEFENCE COLONY

 NEW DELHI -110024