If a company wants to give remuneration to a relative of a Director then Prior approval of Shareholders is required or not. This falls under which clause of section 314.
DIRECTOR, ETC., NOT TO HOLD OFFICE OR PLACE OF PROFIT.
(1) Except with the consentof the company accorded by a special resolution, -
(a) no director of a company shall hold any office or placeof profit, and
(b) no partner or relative of such director, no firm in which such director, or a relative of such
director, is a partner, no private company of which such director is a director or member, and no
director or manager of such a private company, shall hold any office or place of profit carrying a
total monthly remuneration of such sum as may be prescribed , except that of managing director
or manager, banker or trustee for the holders of debentures of the company -
(i) under the company; or
(ii) under any subsidiary of the company, unless the remuneration received from such subsidiary
in respect of such office or place of profit is paid over to the company or its holding company :
Provided that it shall be sufficient if the special resolution according the consent of the company
is past at the general meeting of the company held for the first time after the holding of such office
or place of profit :
Or under section 314 (1B)
(1B) Notwithstanding anything contained in sub-section (1), -
(a) no partner or relative of a director or manager,
(b) no firm in which such director or manager, or relative of either, is a partner,
(c) no private company of which such a director or manager, or relative of either, is a director or
member,
shall hold any office or place of profit in the company which carries a total monthly remuneration
of not less than such sum as may be prescribed, except with the prior consent of the company by
a special resolution and the approval of the Central Government.
Please Clarify
Thanks & Regards
Sarabjeet Kaur
CAclubindia
