Same problem is wid me yaaar even i hav some problems in understanding the subsection 1 and 2 of section 314.

this section was in this nov exam but i hd to left it:-(

And wat about Rs.10000 to Rs.20000 ?

wat about the gap b/w rs. 10,000 and 50,000 ???

????????

U r contradicting ur own comment. I m confused.

section 314 has two parts

First understand the provision, the actual  language  with come after that

PART I

In case 

• director  of company appointed to any  post i.e  place of profit for any amount of salary  

OR

• parties related to director*  appointed any place of profit  i.e. post (other then post of MD, manager, banker , Trustees of debentures ) for salary exceeding10000 (ten thousand) p.m. 

                                               in the company  or  in the subsidiary of company 

then such appointed  shall not be valid unless a special resolution is passed.

*Now understand the meaning of Parties related to Director 

it means 

1. partner of Director 
2. relative of of Director 
3. partnership firm in which such Director is a partner 
4. A Private Company in which such Director is a Member or Manager.

WHEN TO PASS RESOLUTION AS REFERRED ABOVE  : IN FIRST GENERAL MEETING HELD NEXT AFTER APPOINTMENT .

(if any problem arise in understanding this tell me after that i will proceed further )

no problem sir. Pls proceed further.

Thanks for such an easy explanation.

Very nice clarification. Thanks Manmohanjii..........

But please clarify wheather the parties related to director can be appointed to any post for a remuneration of Rs.50,000 or more with the prior consent of the Company and approval of the Central Government.

NOW UNDERSTAND THE PART 2

(Remember that it has no association with part 1 discussed above)

PART 2

[section 314(1B)]

·         no partner or relative of a director or manager,

·         no firm in which such director or manager,

·         no firm in which relative  of director or relative of  manager   is a partner,

·         no private company of which such a director or manager relative  of director or relative of  manager   

shall hold any place of profit in the company for  total monthly remuneration  of Rs. 50000 (Fifty thousand ) OR MORE

except with the

a)    prior consent of the company by a special resolution (prior here means SR must be passed before appointment )

And

b)    the approval of the Central Government [for your kind information Form No. is e- form  24B]:

can i proceed further 

thanks for clarification manmohan sir