Section 314(1b)
This query is : Resolved
28 November 2012
Dear Expert
The provision of section 314(1B) of the Companies Act, will apply to a director holding office of profit and getting remuneration 3Lacs per month.
The provision of section 314(1B) of the Companies Act, will apply to a director holding office of profit and getting remuneration 3Lacs per month.
28 November 2012
Hi
As per section 314(1B) certain persons as given below cannot hold office or place of profit carrying the remuneration of Rs. 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.
Provision of section 314(1B) shall not apply to any appointment of firm of solicitors/advocates, if they are appointed to give advise and are consulted by the company in its work on case to case basis. Therefore, any remuneration or fee received by a professional director as advocates/solicitors for appearing in a Court of Law or Company Law Board/Tribunal in pleading on behalf of the company will not come under the provisions of the section as mentioned above.
As per section 314(1B) certain persons as given below cannot hold office or place of profit carrying the remuneration of Rs. 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.
Provision of section 314(1B) shall not apply to any appointment of firm of solicitors/advocates, if they are appointed to give advise and are consulted by the company in its work on case to case basis. Therefore, any remuneration or fee received by a professional director as advocates/solicitors for appearing in a Court of Law or Company Law Board/Tribunal in pleading on behalf of the company will not come under the provisions of the section as mentioned above.
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28 November 2012
Generally the provision of section 314(1A) deal with such matter but if director is appointed at such place then no need to comply under section 314(1B). Because it is silent about a director hold office with a remuneration exceeding 3 Lakhs per month.
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29 November 2012
Thank u sir.
So we can appoint director without approval of CG at a remuneration of 3 Lakhs per month.
So we can appoint director without approval of CG at a remuneration of 3 Lakhs per month.
29 November 2012
Any office has becomes office of profit under section 314 when a Director obtains anything over and above to which he is entitled as a Director by way of salary, fee, perquisites, commission or otherwise.
Being director if he gets anything it is his remuneration and the provisions of remuneration would apply and not section 314.
Being director if he gets anything it is his remuneration and the provisions of remuneration would apply and not section 314.
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30 November 2012
Thank U Ankur Sir.
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