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Section 314

Nikhil Kalra (CS Final Student) (85 Points)

26 July 2011  

Mr. A who is son of our Managing DIrector's brother was appointed as Dy CEO of the company in March 2008 .
As brother's son does not fall under the definition of Relative as per section 6 of the companies act, so section 314 of the companies act
was not complied with .

But last year in May 2010, Mr . B joined our Board of Directors. Mr. A is Mr. B son's son i.e. grandson , he comes in definition of relative.
Last year , he was drawing a salary of Rs. 80,000/- per month .

Please advise do we need to take permission from central government for giving him this salary as the case is different here . The relative was holding place of profit before the director to whom the employee is related becomes the director of the company.


 3 Replies

Rakesh Dhanuka (Company Secretary) (478 Points)
Replied 26 July 2011

According to me approval of central govt. is not required. Refer sec. 314 (1A)..

Ankit Patniya (Assistant Company Secretary)   (124 Points)
Replied 26 July 2011

Hi friend,

In your company case section 314(1A) will applicable and the no approval is requiered till the period of contract previously executed for such post.

Thanks Regards.

Nikhil Kalra (CS Final Student) (85 Points)
Replied 27 July 2011

Now, We want to increase the salary of Mr. A this year. What will be the procedure  if the salary is to be more than Rs. 2,50,000/- per month or less than Rs. 2,50,000 per month.


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