Sole Selling Agent Appointments Must Meet Section 294(2) Conditions or Are Void; Bombay High Court and Ministry Confirm.

The circular addresses the appointment of sole selling agents by a company's board of directors, emphasizing compliance with sub-section (2) of section 294. This section mandates that such appointments must include a condition for approval at the company's first general meeting, failing which the appointment becomes void ab initio. The Bombay High Court ruled that appointments lacking this condition are inherently invalid. The Ministry of Law concurs, stating that even post-approval by the general meeting, an appointment made without this condition remains void from inception. The circular underscores the necessity of adhering to the statutory requirements for valid appointments.

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