Frnds,
I am reading Section 314 thrice this time. Its very difficult to understand and interpret.
Can pls anyone provide me the easy explanation of the section.
Thnx
Shridhi jain
23 Replies
CA. ANKUR JAIN
(CA.....)
(2800 Points)
Replied 08 December 2010
Same problem is wid me yaaar even i hav some problems in understanding the subsection 1 and 2 of section 314.
this section was in this nov exam but i hd to left it:-(
Shridhi Jain
(Company Secretary)
(1678 Points)
Replied 08 December 2010
And wat about Rs.10000 to Rs.20000 ?
Shridhi Jain
(Company Secretary)
(1678 Points)
Replied 08 December 2010
wat about the gap b/w rs. 10,000 and 50,000 ???
HARDIK
(COMPANY SECRETARY NCFM (Corporate Governance ))
(664 Points)
Replied 08 December 2010
| Originally posted by : HARDIK | ||
 |
Meaning of section 314:- Director and its relative holds office of profit and get remuneration upto 10000 then special resolution required and if its 20000 or more then apart from special resolution cent.govt approval also required. |
 |
Shridhi Jain
(Company Secretary)
(1678 Points)
Replied 08 December 2010
????????
U r contradicting ur own comment. I m confused.
Manmohan ACA, CS
(Chartered Accountant )
(14243 Points)
Replied 08 December 2010
section 314 has two parts
First understand the provision, the actual language with come after that
PART I
In case
- director of company appointed to any post i.e place of profit for any amount of salary
OR
- parties related to director* appointed any place of profit i.e. post (other then post of MD, manager, banker , Trustees of debentures ) for salary exceeding10000 (ten thousand) p.m.
in the company or in the subsidiary of company
then such appointed shall not be valid unless a special resolution is passed.
*Now understand the meaning of Parties related to Director
it means
- partner of Director
- relative of of Director
- partnership firm in which such Director is a partner
- A Private Company in which such Director is a Member or Manager.
WHEN TO PASS RESOLUTION AS REFERRED ABOVE : IN FIRST GENERAL MEETING HELD NEXT AFTER APPOINTMENT .
(if any problem arise in understanding this tell me after that i will proceed further )
Shridhi Jain
(Company Secretary)
(1678 Points)
Replied 08 December 2010
no problem sir. Pls proceed further.
Thanks for such an easy explanation.
Syam kamal
(Company Secretary)
(156 Points)
Replied 08 December 2010
Very nice clarification. Thanks Manmohanjii..........
But please clarify wheather the parties related to director can be appointed to any post for a remuneration of Rs.50,000 or more with the prior consent of the Company and approval of the Central Government.
Manmohan ACA, CS
(Chartered Accountant )
(14243 Points)
Replied 08 December 2010
NOW UNDERSTAND THE PART 2
(Remember that it has no association with part 1 discussed above)
PART 2
[section 314(1B)]
· no partner or relative of a director or manager,
· no firm in which such director or manager,
· no firm in which relative of director or relative of manager is a partner,
· no private company of which such a director or manager relative of director or relative of manager
shall hold any place of profit in the company for total monthly remuneration of Rs. 50000 (Fifty thousand ) OR MORE
except with the
a) prior consent of the company by a special resolution (prior here means SR must be passed before appointment )
And
b) the approval of the Central Government [for your kind information Form No. is e- form 24B]:
Manmohan ACA, CS
(Chartered Accountant )
(14243 Points)
Replied 08 December 2010
can i proceed further
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