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Payment of consultancy fees to director

Shilpa (Company Secretary) (234 Points)

18 June 2015

Query

Payment of Consultancy Fees to a Director of the Company would attract the provisions of Section 197 and 188 of the Cos Act, 2013 ?

Regards

Shilpa

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Kuldipsinh Jadeja (Job) (357 Points)
Replied 27 June 2015

Kindly refer the provisions of section 197(4)(a) which is " Provided that any remuneration for services rendered by any such director in other capacity shall not be so included if -

(a) the services rendered are of a professional nature "

So in my opinion provisions of sec.197 wouldn't be attracted. But the provisions of section 188 would be attraced { refer 188(1)(d) - availing or rendering of any services i.e. it covers consultancy also}