Sole selling agents - Appointment to be approved by Government ‑ Subsequent increase in paid‑up capital of company ‑ Effect on appointment ‑ Whether requires approval of Central Government - Companies Law - Circular : No. 11/77

Circular : No. 11/77 [1/1/76 ‑ CL ‑ V and 12/15/74 ‑ CL-XI], dated 21-11 ‑ 1977. Subject:- Sole selling agents - Appointment to be approved by Government ‑ Subsequent increase in paid ‑ up capital of company ‑ Effect on appointment ‑ Whether requires approval of Central Government A question has arisen whether the approval of the Central Government under sub‑section (3) of section 294AA will be necessary for the continuance of the sole selling agents, even if the provisions of the said section to such appointment were not applicable at the time of appointment of the sole selling agents. In this connection, it is clarified that in case the provisions of section 294AA(3) are not attracted to the appointments of sole selling agents at the time of entering of agreement with them, it will not be obligatory on the companies to comply with the said provisions for the continuance of said appointments for the remaining duration of their current tenure even if the provisions of sub-section (3) of section 294AA become applicable after the appointment due to increase in the capital.