Sitting fee payment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 June 2012 A Section 25 Company passed a resolution in BOD meeting approving payment of sitting fee which is more than the slab prescribed by Act , i.e. Rule 10b.

It falls in the slab of 10000, however approved Rs. 20000 and also paid to the director for first BOD meeting(by deducting TDS).

Now this mistake was discovered after the 2nd BOD meeting was over. The sitting fee payment of 2nd BOD meeting is kept on hold due to this. What is the best way to resolve it and to realise the extra payment made in first BOD meet?

CS Ankur Srivastava

CS Ankur Srivastava (Expert)
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16 June 2012 If the Company wants to avoid Central Government approval. It should reduce the fee and adjust the amount paid to directors in next Board Meeting.

CS Ankur Srivastava

CS Ankur Srivastava (Expert)
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16 June 2012 In case of any public company or private company which is a subsidiary of any public company any provision or change in the remuneration of any director, which purport to increase or has the effect of increasing, whether by Articles or Resolution shall have effect only
1. in case where schedule XIII is applicable, unless such increase is in accordance with the conditions specified in that Schedule VIII;

2. in any other case, unless it is approved by the Central Government.

CS Ankur Srivastava

CS Ankur Srivastava (Expert)
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16 June 2012 The approval of Central Government shall not be required where any such provision or amendement htereof purports to increase or has the effect of increasing the amount of such remuneration by way of only a Sitting fee for attending the Meetings of Board or Committees thereof and the amount of such fee after such increase does not exceed such sum as may be prescribed.

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