Public ltd co pays rent to managing directors of the co?what are the provisions of companies Act for the same?
3 Replies
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 24 February 2010
1. Check Rent agreement between director and the company. If there is no rent agreement then this transaction may be treated as loan to director u/s 295 due to lack of any evidence on the part of the company.
2. Disclosure of interest u/s 299 by director in the board meeting is very imp.
3. Such Rent agreement should be approved by a board resolution. In this BM interested director can not participate and vote due to section 300.
Views of other members solicited.
aasita
(ACA)
(387 Points)
Replied 24 February 2010
But do we have to disclose this kind of arrangement in Borad meeting every year?or one time disclosure is sufficient?
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 24 February 2010
One time disclosure is enough. Do not forget to note this transaction in the board minutes.
Also do not forget to record this transaction in the register maintained by a public company under section 301. Read section 301 (1) carefully. All transaction in which directors are interested u/s 299 are required to ne mentioned in 301 register.
Regards
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