(1) No managing agent and no associate of a managing agent, shall receive any commission or other remuneration from the company, in respect of sales of goods produced by the managed company, if the sales are made from the premises at which they are produced or from the head office of the managing agent or from any place in India.

(2) For sales of any goods produced by the company which are effected from any place outside India not being a place specified in sub-section (1) the managing agent, or an associate of the managing agent, may be appointed as a selling agent subject to the following condition, namely :-

(a) that the managing agent or associate maintains an office at such place for his own business, that is to say, for a business not connected with that of the company or any other company managed by the managing agent;

(b) that the remuneration payable in respect of the work done as selling agent by the managing agent or associate is in accordance with the terms of a special resolution passed by the company in that behalf; and

(c) that no other sums are payable by the company to the managing agent or associate whether by way of expenses or otherwise.

(3) Any appointment made in pursuance of sub-section (2) shall not be made for a term exceeding five years but may be renewed from time to time for a term not exceeding five years on each occasion :

Provided that such renewal shall not be effected earlier than one year from the date on which it is to come into force.

(4) The special resolution referred to in clause (b) of sub-section (2) shall set out the material terms subject to which the appointment of selling agent is made.