short note on : Appointment of sole selling agents.

QUESTIONS

Q 1. What do you mean by ;sole selling agent'?

.9l.ns .

Meaning of Sole Selling Agent
A 'sole selling agent' may be described as an individual, firm or body corporate who or which has been appointed by an agreement and is given exclusive rights to sell in a particular area the products of a company.

Q 2. Describe in detail the procedure for the appointment of sole selling agents
under different circumstances.

OR
State the provisions regarding appointment of sole selling agents under the
Companies Act, 1956. fC.A. (Final) Nov., 1992J
OR
Explain the restrictions on the powers of a company to appoint sole selling agents.
fC.A. (Final) May, 1989J
OR
Write short note on : Appointment of sole selling agents.

.9l.ns .

Appointment of Sole Selling Agents
Sections 294 and 294- AA of the Companies Act regulate the appoinhnent of sole selling
agents. They provide:
1. No company shah appoint a sole selling agent for any area for a term exceeding 5 years at a time. However, a sole-selling agent may be reappointed or his term may be extended for another period but not exceeding 5 years on each occasion.
2. The Board of Directors may appoint a sole selling agent but only subject to the condition that the appoinhnent 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. In case, the company in general meeting, as aforesaid, disapproves the appointment, it shall cease to be valid w.e.f. the date of that general meeting.
3. Where the Central Government is of opinion that the demand for goods of any category, to be specified by that Government, is substantially in excess of the production or supply of such goods and that the services of sole selling agents will not be necessary to create a market for such goods, the Central Government may, by notification in the Official Gazette, declare that sole selling agents shall not be appointed by a company for the sale of such goods, for such period as may be spec~fied in the declaration.
4.. No company shall appoint any individual, firm or body corporate, who or
which has a substantial interest in the comp<;lny as sole selling agent of that