Section 314

This query is : Resolved

udit sharma (Querist)
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08 December 2010 Hi...

There is a Company say ABC Ltd. having 3 Directors Mr.A,Mr.B and Mr.C. Mr. B is brother of Mr. A and is appointed as MD of Director of the Company. Now, as per the provisions of section 314 of the Companies Act, 1956 a relative of Director can hold the office of MD or Manager carrying a monthly remuneration of Rs.15,000/-. Now, since Mr. B is holding the office of MD carrying the monthly remuneration of over and above Rs.10,000, no approval of the members by way of a Special Resolution will be required.

Suppose, Mr. B ceased to be a MD of the Company w.e.f.27.04.2010 and continues to be a Director of the Company with the same remuneration, then whether it can be said that Mr.B is holding the office or place of profit from the date he ceased to be MD of the Company. Whether the consent of the members by way of a special resolution should have been obtained at the GM of the Company held immediately after he ceased to be MD but continued as Director of the Company??????

Please held??????

Jayashree S Iyer

Jayashree S Iyer (Expert)
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09 December 2010 If he continues to be WTD of the Company and does not draw any remuneration other than stated above, he will not be said to hold office of office or place of profit.

udit sharma

udit sharma (Querist)
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09 December 2010 Hi...

But the case represents the relative of Director holding the office as a Director in the Company and can be said to hold the office or place of profit if he is drawing remuneration in excess of Rs.10,000

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