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CS Executive · Setting Up of Business, Industrial and Labour Laws · Corporate Entities - Companies

An inspector is investigating Meera Foods Ltd. He finds that Sunrise Packers Ltd has a Board that is accustomed to act on the directions of Meera Foods or its directors. Under Section 219, the inspector may, with Central Government approval, investigate Sunrise Packers if he considers this necessary because:

The inspector may investigate Sunrise Packers because its Board is accustomed to act on the directions or instructions of Meera Foods or its directors. Section 219 reaches such controlled bodies corporate. Being a customer, sharing a city or having lower turnover does not qualify.

  1. ASunrise Packers' Board is accustomed to act on the directions or instructions of Meera Foods or its directorsCorrect
  2. BSunrise Packers has the same registered office city as Meera Foods
  3. CSunrise Packers is a customer of Meera Foods
  4. DSunrise Packers has a lower turnover than Meera Foods

Explanation

Section 219(c) covers a body corporate whose Board comprises nominees of the company or is accustomed to act in accordance with the directions or instructions of the company or any of its directors. Being a customer, sharing a city or turnover size does not bring a body corporate within the section. This looks at the real control behind the legal form.

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