Director

It is understood that for payment of remuneration to a Director in a Private Limited Company, there are no restrictions or ceilings provided also that there are no restrictions in the Articles of Association.   Internally, remuneration to a Director has to be approved in a General Meeting or extraordinary meeting of the members of the Company. 

Is there any requirement under the Companies Act 1956 that

a) such business should be called Special Business or Ordinary Business and such resolution should be Ordinary or Special?

b) copy of the  resolution,so passed in the EGM,  has to be lodged with MCA or RoC?  

Replies (2)

DEFINATELY IT WILL BE CALLED SPECIAL BUSINESS BUT IT CAN BE RESOLVED BY PASSING ORDINARY RESOLUTION SO NO NEED TO GIVE ANY INTIMATION TO ROC BECAUSE IT IS NOT CATEGORISED U/S 192 ALSO

Dear Ashok,

Kindly appreciate- the funda of Special or Ordinary business is that to judge whether a business is speacial or ordinary you must look in to the relevant section i.e. whether it is required to be passed by Special or ordinary resol. 

Whether a business is special or ordinary is not dependant on passing majority. To elaborate further only 4 business as mentioned in section 173 (1)(a) are ordinary business and rest all the businesses u/s 173(1)(b) are special businesses whether they are reqired to be passed by Special or ordinary resolution.

For example Alteration of Article is required to be passed by Special Resolution u/s 31 but it is an ordinary business.

Similarily appointment of auditor u/s 224 or approval of balance sheet in AGM u/s 209 by shareholders is to be done by ordinary resolution but still they are special business read with section 173.

Further a resolution is required to be registered with ROC via Form-23 only if it is required by  Section 192 and not otherwise.

Regards-Ankur garg       ankur_gargcs @ rediffmail.com

  

 

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