Remuneration in pvt.company, its related party u/s 314

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Harvinder kumar (Querist)
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01 February 2012 Kindly anyone solve following problem

Sit#1- In a plain private company, remuneration of a director, who is already in the Board, is increased/started giving. what will be procedure for it. Is there any limit on the salary in a simple private company? Is sec.314 is mandatory in this case.

Sit#2- In this very Private Company, relative of said director is appointed as a consultant, for instance, having engineering degree and proposed to give 50000 salary p.m.(example). what would be step by step procedure. Is his consent/disclosure required under sec 314(2A)? Is there need to pass special resolution in the Members Meetings?

I hope experts on this site will give their serious attention on the issue

Thanks and Regards,
Harvinder

CS SIDDHARTHA BANIK

CS SIDDHARTHA BANIK (Expert)
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01 February 2012 Hi,
1) Sec 198/309 of CA,1956 provides limit of directors remuneration which is not applicable to pvt. Ltd. Co. Sec 314 is applicable if directors receive any remuneration over and above what he is entitled to receive as director. So in your query of point 1 s.314 is not applicable.

2) In your query 2 pl. check the limit of sec 314(2A)

Thanks,
CS Siddhartha Banik

Harvinder kumar

Harvinder kumar (Querist)
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01 February 2012 Thanks a lot sir....

Regards,
Harvinder

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Harvinder kumar

Harvinder kumar (Querist)
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01 February 2012 Dear Banikji,
one question arises in my mind, sec198 & 309 do not applicable on pvt. ltd. as per radhe shyam v. OL, AOA provides the remuneration of a director in Pvt. Company.
If board increases the concerned director salary from nil to Rs.100000 (for example), this powers are entrusted with the board to decide as they wish. In this very case too, there is no need to get SR (mentioned in sub sec 1 of sec 314. which is specifically written it. Kindly throw light of your knowledge on the issue.

Secondly, As per sub.sec 2A of sec 314, if individual is appointed on the office or place of office, whether he is or is not related needs to declare to the company.

Looking forward to your kind reply..

Regards,
Harvinder

Harvinder kumar

Harvinder kumar (Querist)
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01 February 2012 Request to all experts plz reply.

Thanks and Regards,
Harvinder kumar Dinker