Gargi Ranade (CS) (619 Points)
27 February 2009Hi Dear all,
please guide me on my following querry:
Articles of my Company specifically mention payment of sitting fees ,unfortunatly due to ignorence of the fact we have never paid the same ;what will be the consequences? how can I rectify this mistake ? Not a single director will take action on the said non-compliances but other than this is there any legal consequenses ?
Muralidharan
(Self Employed)
(1034 Points)
Replied 27 February 2009
| Originally posted by :Gargi Ranade | ||
| " | Hi Dear all, please guide me on my following querry: Articles of my Company specifically mention payment of sitting fees ,unfortunatly due to ignorence of the fact we have never paid the same ;what will be the consequences? how can I rectify this mistake ? Not a single director will take action on the said non-compliances but other than this is there any legal consequenses ? |
" |
Articles of every company incorporated in India will carry a provision for payment of sitting fees to directors for attending meetings of the board or committee thereof. Most closely held companies and private limited companies do not pay sitting fees to its directors and it shall not be construed as a violation of the act. You have also said that non of the directors will make a claim for the same. However as a matter of abundant caution you can pass a resolution in a board meeting for non-payment of sitting fees to the directors. (this resolution shall be back dated if consented to by all directors).
If you wish to pay sitting fees from now onwards then pass necessary resolution in a board meeting and then start paying the same. Maintain a Sitting Fees Register and obtain signature from the Directors on a revenue stamp upon payment of the same. After the year end issue a payment of sitting fees certificate to the director for this information and records. Please note that the amount shall be restricted to the amount as may be mentioned in the Articles or as per the amount stipulated by the Government from time to time.
with regards
Muralidharan
Gargi Ranade
(CS)
(619 Points)
Replied 27 February 2009
Thanks a lot Murlidharan Sir, As I am newly joined Comapny Secretary, I am facing many practicle difficulties which generally, during my training my boss used to clarify; thanks a lot for your prompt and elaborated answer
CAclubindia
