Corporate law sec. 314
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
11 April 2013
Dear all,
what is the difference b/w section 314 (1) and 314(1B) it specifies multiple thereshold limits of remuneration 50000 and rs.250000.
very confused please advice the diff. between the above two sections (office or place of profit)
what is the difference b/w section 314 (1) and 314(1B) it specifies multiple thereshold limits of remuneration 50000 and rs.250000.
very confused please advice the diff. between the above two sections (office or place of profit)
12 April 2013
Hi
As per section 314(1) certain persons as given below cannot hold office or place of profit carrying the remuneration of Rs. 10,000 p.m. or more in the company, unless a special resolution to that effect has been passed in the general meeting of the company:—
1. Any partner of the firm in which director of the company is also a partner;
2. Any relative of a director of the company;
3. Any firm in which a director or his relatives or both are partner;
4. Any private company in which director of the company is holding office of director or member;
5. Any director/manager of a private company in which director of the company is holding office of director or member.
For computing the limit of Rs. 10,000 per month, bonus, leave encashment, reimbursement of medical expenses, etc., which are not events of monthly regularity or occurrence cannot be taken into account.
As per section 314(1) certain persons as given below cannot hold office or place of profit carrying the remuneration of Rs. 10,000 p.m. or more in the company, unless a special resolution to that effect has been passed in the general meeting of the company:—
1. Any partner of the firm in which director of the company is also a partner;
2. Any relative of a director of the company;
3. Any firm in which a director or his relatives or both are partner;
4. Any private company in which director of the company is holding office of director or member;
5. Any director/manager of a private company in which director of the company is holding office of director or member.
For computing the limit of Rs. 10,000 per month, bonus, leave encashment, reimbursement of medical expenses, etc., which are not events of monthly regularity or occurrence cannot be taken into account.
12 April 2013
Circumstances u/s 314(1) under which special resolution is not applicable:
Under the following circumstances, the special resolution shall not be required for appointment of a person on the office or place of profit:—
1. If the monthly remuneration is less than Rs. 10,000 p.m.;
2. If the office or place of profit held by such person(s) in the capacity of managing director/whole-time director/manager/banker/debentureholder trustee;
3. If relative of director has been appointed before becoming director in the company;
4. If director of subsidiary company hold office or place of profit in holding company;
5. If such person is rendering professional advice to the company including director who is consulted or who gives his professional advice to the company occasionally and receive remuneration for such service;
6. If a company purchases or sell materials from or to a director of the company or any of the persons mentioned above to which section 297 will apply. Any person appointed to an office of agent for the sale of the output of the company will be deemed to be holding an office or place of profit under section 314(1).
Under the following circumstances, the special resolution shall not be required for appointment of a person on the office or place of profit:—
1. If the monthly remuneration is less than Rs. 10,000 p.m.;
2. If the office or place of profit held by such person(s) in the capacity of managing director/whole-time director/manager/banker/debentureholder trustee;
3. If relative of director has been appointed before becoming director in the company;
4. If director of subsidiary company hold office or place of profit in holding company;
5. If such person is rendering professional advice to the company including director who is consulted or who gives his professional advice to the company occasionally and receive remuneration for such service;
6. If a company purchases or sell materials from or to a director of the company or any of the persons mentioned above to which section 297 will apply. Any person appointed to an office of agent for the sale of the output of the company will be deemed to be holding an office or place of profit under section 314(1).
12 April 2013
Circumstances under which section 314(1B) is applicable and consent of Central Government is required:
As per section 314(1B) certain persons as given below cannot hold office or place of profit carrying the remuneration of Rs. 2,50,000 p.m. or more in the company, unless special resolution (See Appendix 3) to that effect has been passed in the general meeting of the company and prior approval of the Central Government has been obtained:—
1. any partner of the firm in which director of the company is also a partner;
2. any relative of a director of the company;
3. any firm in which a director or his relative or both are partner;
4. any private company in which director of the company is holding office of director or member;
5. any director/manager of a private company in which director of the company is holding office of director or member.
Rule 3 of the Directors Relatives (Office of Place of Profit) Rules 2011 requires approval of CG where the monthly remuneration in respect of section 314(1B) exceeds Rs. 2,50,000. If the remuneration is less than Rs, 2,50,000/- then only Special Resolution will be sufficient.
Remuneration till Rs. 10,000, section 314(1) apply there after (1B).
As per section 314(1B) certain persons as given below cannot hold office or place of profit carrying the remuneration of Rs. 2,50,000 p.m. or more in the company, unless special resolution (See Appendix 3) to that effect has been passed in the general meeting of the company and prior approval of the Central Government has been obtained:—
1. any partner of the firm in which director of the company is also a partner;
2. any relative of a director of the company;
3. any firm in which a director or his relative or both are partner;
4. any private company in which director of the company is holding office of director or member;
5. any director/manager of a private company in which director of the company is holding office of director or member.
Rule 3 of the Directors Relatives (Office of Place of Profit) Rules 2011 requires approval of CG where the monthly remuneration in respect of section 314(1B) exceeds Rs. 2,50,000. If the remuneration is less than Rs, 2,50,000/- then only Special Resolution will be sufficient.
Remuneration till Rs. 10,000, section 314(1) apply there after (1B).
Querist : Anonymous
Querist :
Anonymous
(Querist)
19 April 2013
thanks sir
19 April 2013
welcome.....
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