Section 314

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

24 April 2010 Dear Members,

A Limited Company is having 6 Directors on its Board out of them 4 are relatives (Brothers). One is designated as MD and 3 remaining as WTD.

The Company wants increase the remuneration of all WTD and MD to Rs. 350000 per month.

Please enlighten about the imlications of Section 314, will Company require to take permission from Central Govenment ? or a Special/Ordinary resolution will suffice?

Regards,
Sudhir Mutha

Rasesh

Rasesh (Expert)
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25 April 2010 Please ensure that the increased remunerations is within the limits as prescribed under the act i.e. Sec 198 read with Sec 309. If not, then whether under Sch XIII. Under which head of sch XIII. Accordingly, Central government's approval has to be decided.

Sec. 314 is not relevant in this matter. Type of resolution would depend on the above.

Querist : Anonymous

Querist : Anonymous (Querist)

26 April 2010 Increased remuneration is within the limit as prescribed u/s 198 r.w. 309.

Can you please give my any analysis or any case law for clarifying the situatuion.

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Rasesh

Rasesh (Expert)
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26 April 2010 Ordinary resolution will do. No further approval of CG. Sec. 314 will not apply to managerial appointments.

Querist : Anonymous

Querist : Anonymous (Querist)

30 April 2010 I have to give some citation or analysis to our Auditors as they are not ready to accept that in this case no CG permission is required.

Please provide if any one have some description clarifying the same.