Remuneration

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Megha Gupta (Querist)
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21 January 2009 Hello, my querry is that there are two group company viz "A" Co. and "B" Co. in the B there is an employee getting remuneration of more than 24 lakh but now this employee has resigned from the Co. B and appointed as a Director in Co. A and getting remuneration which is under Schedule XIII but now after resiging he is providing his services to Co. B as a technical Expert and getting fee as before i.e. 24 lakh but not as remuneration . he is getting as consultancy fee in the capacity of technical expert.

now pls let me know wht should i do in this matter? is there any compliance to fulfill and Companies Act?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 January 2009 Pl check section 314(1B)of the Companies Act,1956.

Megha Gupta

Megha Gupta (Querist)
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21 January 2009 sir but sec 314 (1B) saya for remuneration but i am asking that the employee getting consultancy fee in Co. B
in the capacity of technical expert

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 January 2009 Pl see para 7 of circular no 14 of 1975 dated 5/6/1975 of Department of Company Affairs.

CS Arpita Rajpurohit

CS Arpita Rajpurohit (Expert)
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21 January 2009 The prohibition under sub-sections (1) and (1-B) is not applicable to the remuneration/compensation given to the concerned persons for services of a professional nature rendered by them to the company in their professional capacity, such as advocate, chartered accountant, solicitor (Harper Ticket Issuing and Recording Machines Ltd., Re, (1912) WN 263 : 29 TLR 63), doctor, architect, engineer and others. The prohibition will however apply in case such professional services are rendered by the concerned persons to the company on regular retainership basis binding themselves to render such services as and when called upon by the company. Liberator Bldg. Society, Re, (1894) 71 LT 406.