Sec. 314 of the compnays act 1956
This query is : Resolved
21 May 2013
full Detail of sec.314
24 May 2013
314. DIRECTOR, ETC., NOT TO HOLD OFFICE OR PLACE OF PROFIT
(1) Except with the consent of the company accorded by a special resolution, -
(a) no director of a company shall hold any office or place of 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 1[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 passed at the
general meeting of the company held for the first time after the holding of such office or place of profit :
Provided further that where a relative of a director or a firm in which such relative is a partner ; is appointed to an
office or place of profit under the company or a subsidiary thereof without the knowledge of the director, the consent of
the company may be obtained either in the general meeting aforesaid or within three months from the date of the
appointment, whichever is later.
Explanation. - For the purpose of this sub-section, a special resolution according consent shall be necessary for every
appointment in the first instance to an office or place of profit and to every subsequent appointment to such office or
place of profit on a higher remuneration not covered by the special resolution, except where an appointment on a time
scale has already been approved by the special resolution.
(1A) Nothing in sub-section (1) shall apply where a relative of a director or a firm in which such relative is a partner
holds any office or place of profit under the company or a subsidiary thereof having been appointed to such office or
place before such director becomes a director of the company.
(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
2[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.
[Proviso to sub-section (1B) omitted by the Companies (Amendment) Act, 1988 w.e.f. 15-6-1988.]
(2) (a) If any office or place of profit is held in contravention of the provisions of sub-section (1), the director, partner,
relative, firm, private company, 3[***] or the manager, concerned, shall be deemed to have vacated his or its office as
such on and from the date next following the date of the general meeting of the company referred to in the first proviso
or, as the case may be, the date of the expiry of the period of three months referred to in the second proviso to that
sub-section, and shall also be liable to refund to the company any remuneration received or the monetary equivalent
of any perquisite or advantage enjoyed by him or it for the period immediately preceding the date aforesaid in respect
of such office or place of profit.
(b) The company shall not waive the recovery of any sum refundable to it under clause (a) unless permitted to do so
by the Central Government.
(2A) Every individual, firm, private company or other body corporate proposed to be appointed to any office or place of
profit to which this section applies shall, before or at the time of such appointment, declare in writing whether he or it is
or is not connected with a director of the company in any of the ways referred to in sub-section (1).
(2B) If, after the commencement of the Companies (Amendment) Act, 1974, any office or place of profit is held,
without the prior consent of the company by a special resolution and the approval of the Central Government, the
partner, relative, firm or private company appointed to such office or place of profit shall be liable to refund to the
company any remuneration received or the monetary equivalent of any perquisite or advantage enjoyed by him, on
and from the date on which the office was so held by him.
(2C) If any office or place of profit is held in contravention of the provisions of the proviso to sub-section (1B), the
director, partner, relative, firm, private company or manager concerned shall be deemed to have vacated his or its
office as such on and from the expiry of six months from the commencement of the Companies (Amendment) Act,
1974, or
the date next following the date of the general meeting of the company referred to in the said proviso, whichever is
earlier, and shall be liable to refund to the company any remuneration received or the monetary equivalent of any
perquisite or advantage enjoyed by him or it for the period immediately preceding the date aforesaid in respect of such
office or place of profit.
(2D) The company shall not waive the recovery of any sum refundable to it under sub-section (2B) 4[***] unless
permitted to do so by the Central Government.
(3) Any office or place shall be deemed to be an office or place of profit under the company within the meaning of this
section, -
(a) in case the office or place is held by a director, if the director holding it obtains from the company anything by way
of remuneration over and above the remuneration to which he is entitled as such director, whether as salary, fees,
commission, perquisites, the right to occupy free of rent any premises as a place of residence, or otherwise ;
(b) in case the office or place is held by an individual other than a director or by any firm, private company or other
body corporate, if the individual, firm, private company or body corporate holding it obtains from the company anything
by way of remuneration whether as salary, fees, commission, perquisites, the right to occupy free of rent any premises
as a place of residence, or otherwise.
(4) Nothing in this section shall apply to a person, who being the holder of any office of profit in the company, is
appointed by the Central Government, under section 408, as a director of the company.
(1) Except with the consent of the company accorded by a special resolution, -
(a) no director of a company shall hold any office or place of 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 1[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 passed at the
general meeting of the company held for the first time after the holding of such office or place of profit :
Provided further that where a relative of a director or a firm in which such relative is a partner ; is appointed to an
office or place of profit under the company or a subsidiary thereof without the knowledge of the director, the consent of
the company may be obtained either in the general meeting aforesaid or within three months from the date of the
appointment, whichever is later.
Explanation. - For the purpose of this sub-section, a special resolution according consent shall be necessary for every
appointment in the first instance to an office or place of profit and to every subsequent appointment to such office or
place of profit on a higher remuneration not covered by the special resolution, except where an appointment on a time
scale has already been approved by the special resolution.
(1A) Nothing in sub-section (1) shall apply where a relative of a director or a firm in which such relative is a partner
holds any office or place of profit under the company or a subsidiary thereof having been appointed to such office or
place before such director becomes a director of the company.
(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
2[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.
[Proviso to sub-section (1B) omitted by the Companies (Amendment) Act, 1988 w.e.f. 15-6-1988.]
(2) (a) If any office or place of profit is held in contravention of the provisions of sub-section (1), the director, partner,
relative, firm, private company, 3[***] or the manager, concerned, shall be deemed to have vacated his or its office as
such on and from the date next following the date of the general meeting of the company referred to in the first proviso
or, as the case may be, the date of the expiry of the period of three months referred to in the second proviso to that
sub-section, and shall also be liable to refund to the company any remuneration received or the monetary equivalent
of any perquisite or advantage enjoyed by him or it for the period immediately preceding the date aforesaid in respect
of such office or place of profit.
(b) The company shall not waive the recovery of any sum refundable to it under clause (a) unless permitted to do so
by the Central Government.
(2A) Every individual, firm, private company or other body corporate proposed to be appointed to any office or place of
profit to which this section applies shall, before or at the time of such appointment, declare in writing whether he or it is
or is not connected with a director of the company in any of the ways referred to in sub-section (1).
(2B) If, after the commencement of the Companies (Amendment) Act, 1974, any office or place of profit is held,
without the prior consent of the company by a special resolution and the approval of the Central Government, the
partner, relative, firm or private company appointed to such office or place of profit shall be liable to refund to the
company any remuneration received or the monetary equivalent of any perquisite or advantage enjoyed by him, on
and from the date on which the office was so held by him.
(2C) If any office or place of profit is held in contravention of the provisions of the proviso to sub-section (1B), the
director, partner, relative, firm, private company or manager concerned shall be deemed to have vacated his or its
office as such on and from the expiry of six months from the commencement of the Companies (Amendment) Act,
1974, or
the date next following the date of the general meeting of the company referred to in the said proviso, whichever is
earlier, and shall be liable to refund to the company any remuneration received or the monetary equivalent of any
perquisite or advantage enjoyed by him or it for the period immediately preceding the date aforesaid in respect of such
office or place of profit.
(2D) The company shall not waive the recovery of any sum refundable to it under sub-section (2B) 4[***] unless
permitted to do so by the Central Government.
(3) Any office or place shall be deemed to be an office or place of profit under the company within the meaning of this
section, -
(a) in case the office or place is held by a director, if the director holding it obtains from the company anything by way
of remuneration over and above the remuneration to which he is entitled as such director, whether as salary, fees,
commission, perquisites, the right to occupy free of rent any premises as a place of residence, or otherwise ;
(b) in case the office or place is held by an individual other than a director or by any firm, private company or other
body corporate, if the individual, firm, private company or body corporate holding it obtains from the company anything
by way of remuneration whether as salary, fees, commission, perquisites, the right to occupy free of rent any premises
as a place of residence, or otherwise.
(4) Nothing in this section shall apply to a person, who being the holder of any office of profit in the company, is
appointed by the Central Government, under section 408, as a director of the company.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- ITC temporary reversal and reclaim
- Applicable TDS rate for sale of property in Nov 2024
- Inventory of finished goods
- Sale of property furniture sale
- Quiery in relation to GST liability in case of an advocate who has obtained GST registration.
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- RCM INVOICING FROM NOV-2024
- Confusion around Form 26QB fields
- TDS under section and rate of TDS
- GST input on scooter purchased
- TDS under section 194Q and TCS under section 206C
- GST input on car insurance and repairs
- GST input on Diwali gift to employee
- GST input on Mobile Handset
- Material and freight in same invoice
- TDS under section 194J inclusive of reimbursement of expenses
- TDS on Material and Labour in same invoice
- Should I be worried about and rectify reporting Jan,Feb ,March 2024 foreign salary in schedule FA?
Trending Online Classes
CAclubindia
