Appointment to be approved by Government - Whether, where the section is not attracted to appointment of sole selling agent at the time of entering of agreement, it will be obligatory to comply with the section for continuance of appointment for remaining duration of current tenure

Clarification on Central Government Approval for Sole Selling Agents u/s 294AA(2) and Tenure Extensions.

The circular addresses whether the Central Government's approval under section 294AA(2) is required for the continuance of a sole selling agent's appointment if the section was not applicable at the time of their initial appointment. It clarifies that if section 294AA(2) was not applicable when the agreement was made, companies are not obligated to comply with it for the current tenure's continuation. However, this exemption does not apply to any extensions of the tenure, even if the sole selling agents later acquire a substantial interest as defined under section 294AA.