Appointment of Manager/HR Advisor, relative of director

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Guest

Guest (Querist)

22 December 2010 Ours is pvt.ltd company. We have to appoint a Manager/HR Advisor, who is relative/mother of director. Salary exceeds 65,000/- p.m.

For Private Limited Company is there any limit for remuneration to such persons.

Please advise whether this required central Government approval.

Please send the draft resolution.

Is is comes under EGM/Board Meeting.

As a HR Manager Only not a Manager

udit sharma

udit sharma (Expert)
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22 December 2010 Hi...

Section 314 of the Companies Act,1956 is applicable to both Private Limited and Public Limited Companies.

Pursuant to section 314(1B) of the Companies Act, 1956 read with Director's (Office or Place of Profit) Rules, 2003, since the relative of Director is to hold the office or place of profit in the Company carrying a monthly remuneration in excess of Rs.50,000/- prior approval of the Shareholders in the General Meeting by way of a Special Resolution has to be taken and also prior approval of the Central Government has to be taken.

Prescribed form for obtaining the approval of the Central Government is E-form 24B as per Companies (Central Government's) General Rules & Forms, 1956.

God Bless

Udit Sharma

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Ajay Mishra

Ajay Mishra (Expert)
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22 December 2010 Hi

Please clarify, you want to appoint Manager under Companies Act, 1956 or Manager as HR Adviser ?

Regards
CS Ajay

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udit sharma

udit sharma (Expert)
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22 December 2010 Dear Ajay Sir,

In my opinion, irrespective of whether the relative of the Director is appointed as Manager or HR Advisor, the relative will be said to be holding an office or place of profit in the Company if he/she receives anything whether by way of fees, commission, right to occupy rent free premises etc. from the Company.

Regards