Applicability of sec 314

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2013 Do Section 314(1)(a)is applicable to every Director irrespective of the limit of Rs. 50,000. Do we need to take SR in appointment of Director wihtout considering the limit of Rs. 50,000?

Ajay Mishra

Ajay Mishra (Expert)
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06 July 2013 Hi

As per section 314(3), a director is said to be holding 'Office or Place of Profit' in a company, if he obtains from the company in addition to the remuneration to which he is entitled as a director any salary, fees, commission or any other perquisites while holding the office of a director.
An individual other than a director or any firm, private company or body corporate is said to be holding office or place of profit in a company, if they obtain from the company, by way of remuneration, any salary, fees, commission or any other perquisites while holding the office or place of profit in the company.

If director is receiving any money in addition to position of director will cover under section 314.

Ajay Mishra

Ajay Mishra (Expert)
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06 July 2013
As per section 314 certain persons cannot be appointed or allow to hold an office or place of profit in the company unless, they comply with the requirement of the provisions of this section. If any person is proposed to hold such office or place of profit in the company then company has to take consent of the shareholders by passing special resolution in the general meeting of the company.
No such consent is required, if a director receiving remuneration by holding such office or place in subsidiary of the company returned such remuneration to the subsidiary or its holding company.

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