Appointment under 314

This query is : Resolved

Sheetal (Querist)
Follow

22 April 2009 A relative of MD is appointed and the Board decides 2 pay a remuneration od Rs. 45,000/-, so can the Co. pay him/ her such remuneration from the dare of his/ herappointment or it has 2 first seek shareholders' consent and den only pay it.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

22 April 2009 The company can pay remuneration from the date of appointment since the section says Special resolution may be passed at first general meeting held after the appointment.

Priyanka Sarda

Priyanka Sarda (Expert)
Follow

23 April 2009 Sec 314(1)-When a relative of director is given a position in the co.(any post except the post of M.D/Manager/Banker/Debenture Trustee) for a total monthly remuneration of Rs.10000 or more then special resolution is to be passed in the general meeting just after his appointment. Remuneration will not include LTC/Bonus.
Hence the Co. can pay Remuneration of Rs.45000 p.m after passing special resolution

Upgrade to CAclubindia Pro. Subscribe Now!

Ankur Garg

Ankur Garg (Expert)
Follow

29 April 2009 Hi,

Your case is governed by section 314(1B) and not by sub section (1) as the remuneration is more then Rs. 20,000. Hence in your case prior approval of shareholders is required.

Answer given by Mr. Warrier is wrong because answer given by him is based on explanation of section 314 (1) which is not applicable in your case and for your info same explanation is not applicable to section 314 (1B).

Best Regards