section 314
This query is : Resolved
28 June 2010
A Director appointed his daughter as an employee in the company,monthly salary being Rs 15,000 /- whether special resolution is to be passed for the above case ?
RAMESH KUMAR VERMA
(Expert)
28 June 2010
DEAR KHAN,
YES,
In terms of Section 314(1), approval of shareholders by passing a special resolution in general meeting will be required for appointment of any of the following persons to an office or place of profit .
REGARDS,
YES,
In terms of Section 314(1), approval of shareholders by passing a special resolution in general meeting will be required for appointment of any of the following persons to an office or place of profit .
REGARDS,
28 June 2010
Approval of shareholders in General meeting
In terms of Section 314(1), approval of shareholders by passing a special resolution in general meeting will be required for appointment of any of the following persons to an office or place of profit
a. Any director
This section will be attracted even if the director receives an additional one rupee towards discharge of service in a capacity other than a director.
b. Partner in a firm in which a director is a partner
c. Relative of such director
The Madras High Court in A R Sundarasanam v Madras PHJS Nidhi Limited (1985) Comp Cas 776 (Mad) held that the office or place of profit held by a relative of a director is attracted by this section only if the director himself holds an office or place of profit. The words "such director' in subsection (1)(b) referred to the director already holding the office of profit and not to any other director. This lacuna in law is proposed to be plugged by the Companies (Amendment) Bill, 2003 as the article 'a' has substituted the words 'such' before the word director.
d. A firm in which such director or relative is a partner
e. Any private company of which a director is a director or member
f. Any director or manager of such a private company
i.e if director is holding an office or place of profit in company, and his daugther is appointed in the company ,then section 314(1) apply.
See above case as reference.
In terms of Section 314(1), approval of shareholders by passing a special resolution in general meeting will be required for appointment of any of the following persons to an office or place of profit
a. Any director
This section will be attracted even if the director receives an additional one rupee towards discharge of service in a capacity other than a director.
b. Partner in a firm in which a director is a partner
c. Relative of such director
The Madras High Court in A R Sundarasanam v Madras PHJS Nidhi Limited (1985) Comp Cas 776 (Mad) held that the office or place of profit held by a relative of a director is attracted by this section only if the director himself holds an office or place of profit. The words "such director' in subsection (1)(b) referred to the director already holding the office of profit and not to any other director. This lacuna in law is proposed to be plugged by the Companies (Amendment) Bill, 2003 as the article 'a' has substituted the words 'such' before the word director.
d. A firm in which such director or relative is a partner
e. Any private company of which a director is a director or member
f. Any director or manager of such a private company
i.e if director is holding an office or place of profit in company, and his daugther is appointed in the company ,then section 314(1) apply.
See above case as reference.
Ankur Garg
(Expert)
28 June 2010
Hi,
Post approval of SHs through Special resolution u/s 314(1) is required only if director is holding O or POP with in the meaning of section 314(3).
If the director is not drawing anything over and above the remuneration to which he is entitled as a director, no approval is required for the proposed appointment.
Regards
Post approval of SHs through Special resolution u/s 314(1) is required only if director is holding O or POP with in the meaning of section 314(3).
If the director is not drawing anything over and above the remuneration to which he is entitled as a director, no approval is required for the proposed appointment.
Regards
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