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Thread: Sole selling agents

  1. #1
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    Thumbs up Sole selling agents

    A company cannot appoint a sole selling agent
    of any area
    for a term exceeding 5 years
    at a time.



    But it can re-appoint, or extend
    the term of office
    by further period
    not exceeding 5 years
    on each occasion.



    The Board of directors
    “shall not appoint a sole selling agent
    for any area
    except subject to the condition
    that the appointment shall cease to be valid
    if
    it is not approved by the company
    in the first general meeting
    held after the date
    on which the appointment is made"

  2. #2
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    Thumbs up When appointment of a sole selling agent is void ab initio

    The appointment of a sole selling agent
    must be made by the company
    in its general meeting
    and such clause must be inserted
    as a mandatory condition
    in all appointments of sole selling agent
    an appointment without a such a clause being inserted is void ab initio.

  3. #3
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    Thumbs up Disapproval of the appointment

    Section 294(2A)

    If
    the company
    in the general meeting
    disapproves the appointment
    it shall become invalid
    from the date of the general meeting

  4. #4
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    Default

    Where before the commencement of this Act,
    a company has appointed a sole selling agent
    for any area
    for a period of not less than five years,
    the appointment shall be placed
    before the company
    in general meeting
    within a period of six months
    from such commencement
    and the company
    in general meeting
    may, by resolution—

    (a) if the appointment was made on or after the 15th day of February, 1955,
    terminate the appointment forthwith or with effect from such later date as may be specified in the resolution

    and

    (b) if the appointment was made before the date specified in clause (a),
    terminate the appointment with effect from such date as may be specified in the resolution, not being earlier than five years from the date on which the appointment was made, or the expiry of one year from the commencement of this Act,
    whichever is later.

  5. #5
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    Lightbulb Central Government may require company to furnish such information regarding the terms and conditions of the appooointment

    Where a company has a sole selling agent,
    the Central Government may require
    the company to furnish to it
    such information regarding the terms and conditions of the appointment
    as it considers necessary
    for determining whether or not such terms and conditions are prejudicial
    to the interest of the company.

    If the company refuses or neglects to furnish any such information,
    the Central Government
    may appoint a suitable person
    to investigate and report on the terms and conditions contained in the appointment of the sole selling agent.

    After examining it with great care
    the information furnished
    either by the company or by investigator
    if
    the Central Government is of the opinion
    that the terms and conditions of the appointment
    are prejudicial to the interest of the company,
    it may make the necessary modifications
    so that they are not longer prejudicial to the interests of the company.

    The appointment of sole selling agent
    shall be regulated by the terms and conditions
    as varied by the Central Government
    from the date as may be specified by the Central Government

    [Section 294(5)]
    Last edited by companies act; 31-05-2010 at 12:03 PM.

  6. #6
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    Thumbs up where the company has more than one selling agents

    where thecompany has more selling agents than one,
    the Central Government may
    exercise similar powers referred to above in Section 294(5)

    only for the purpose of determining
    whether any of those selling agents should be declared to be the sole selling agent, and if so, for which area or areas.
    [Section 294(6)]

  7. #7
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    Thumbs up duty of the company

    It shall be the duty of the company
    (a) to produce to the person under clause (b) of subsection (5) or clause (b) of sub-section (6) all books and papers of, or relating to, the company which are in its custody or power,
    and
    (b) otherwise to give to that person all assistance in connection with the investigation which the company is reasonably able to give
    Section 294(7)

  8. #8
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    Thumbs up If the company refuses or neglects to perform the duties

    If the company refuses or neglects to perform these two duties,
    then the company and every officer thereof who is in default
    shall be punished with fine extending to Rs. 50,000
    and
    with a further fine of not less than Rs. 500 for every day
    after the first during which such refusal or neglect continues
    [Section 294(8)]

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