Rent to Directors

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Gourav Mehta (Querist)

23 December 2009 A director of Pvt. Ltd. company is receiving rent from the company for the factory building belonging to the director.

Now my question is whether any resolution is to be passed in the board meeting (special/ordinary).

what if all the directors are family members of the interested director.

In such a case any other formalities have to be completed.

Please suggest me.

Thanks in anticipation

Gourav Mehta

Rasesh

Rasesh (Expert)

23 December 2009 A first time board resolution is required in which the director makes the declaration and does not participate in the business. The question of ordinary or special resolution does not arise in the case of board resolution.

The rent transactions has to be recorded in the register u.s 301.

Gourav Mehta

Gourav Mehta (Querist)

24 December 2009 Thanks for the reply, but if all the other directors are also the family members only, then whether they are eligible to pass the required resolution.

Ankur Garg

Ankur Garg (Expert)

24 December 2009 Entire board is interested in the transaction so pass an ordinary resolution in the EGM.

Kindly note special or ordinary resolutions are passed in the general meetings and not in board meetings.

In board meetings resolutions normally passed with simple majority or with unanimous consent as the case may be.

In your case disclosure of interest by dir. is nacasary u/s 299 and entry in 301 register is also necessary.

Regards

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