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of <h1>Consent Needed for Director-Related Contracts Under Section 297 of the Companies Act, 1956; Central Approval for Large Firms</h1> Section 297 of the Companies Act, 1956, requires the Board of Directors' consent for contracts involving directors or their relatives with the company, particularly for the sale, purchase, or supply of goods, services, or underwriting shares. For companies with paid-up capital of at least one crore rupees, prior approval from the Central Government is necessary. Exceptions include transactions at market prices or regular business dealings not exceeding five thousand rupees annually. Urgent contracts exceeding this limit can proceed without prior consent but must be ratified within three months. Board consent must be formalized through a resolution, and non-compliance renders contracts voidable.
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