Hi...
There is a Company say ABC Ltd. having 3 Directors Mr.A,Mr.B and Mr.C. Mr. B is brother of Mr. A and is appointed as MD of Director of the Company. Now, as per the provisions of section 314 of the Companies Act, 1956 a relative of Director can hold the office of MD or Manager carrying a monthly remuneration of Rs. 15,000/-. Now, since Mr. B is holding the office of MD carrying the monthly remuneration of over and above Rs. 10,000, no approval of the members by way of a Special Resolution will be required.
Suppose, Mr. B ceased to be a MD of the Company w.e.f.27.04.2010 and continues to be a Director of the Company with the same remuneration, then whether it can be said that Mr.B is holding the office or place of profit from the date he ceased to be MD of the Company. Whether the consent of the members by way of a special resolution should have been obtained at the GM of the Company held immediately after he ceased to be MD but continued as Director of the Company??????
Please held??????
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Section 314 of the Companies Act, 1956
As per the provision of 314 of Companies Act, 1956, if a director drawing the remuneration over and above as director of the company, then he will be considered as office or place of profit.
in the present case, Mr. B is drawing remuneration only as director and not any other capacity.
thus in the present case, question of applicability of section 314 does not arise and no need to pass the SR.
With Regards
Rajeev Nayak
As per the provision of 314 of Companies Act, 1956, if a director drawing the remuneration over and above as director of the company, then he will be considered as office or place of profit.
in the present case, Mr. B is drawing remuneration only as director and not any other capacity.
thus in the present case, question of applicability of section 314 does not arise and no need to pass the SR.
With Regards
Rajeev Nayak
Dear Mr. Udit,
Section 314 is not applicable in your case. Since all of them are directors of the Company and drawing salary only in the capacity of Directors.
Any office is called office or place of profit:-
In case of Director:- if the director holding obtains from the company anything by way of remuneration over and above the remuneration to which he is entitled as such director, whether as salary, fees, commision, perquisites or otherwise.
In case of other than Director:- If the office or place is held by an individual other than a director or by any firm, private company or body corporate if the individual, firm, private company or other body corporate holding it obtains from the company anything by way of remuneratino whether salary, fees, commission, perquisites or otherwise
@ Mr Ankur!
It will be of great help if you please explain the present scenario concerning section 314 in case of a Private Limited Co:
1. Promotor Director is drawing salary since inforporation for actually rendering technical services.
a. Under Section 314 approval from Central Govt of Salaries payment is to be obtained.
b.If yes then what about the amounts of salaries got in the past or approval will be granted retrospectively.
c. Present salary is Rs. 105000 per month.
2. Any provision to skip the past.
Regards.
contact @ vkbajaj.co.in
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