section 314 -urgent help required please

Page no : 2

nilesh dube (Service ) (74 Points)
Replied 27 February 2010

As far as the applicability of Sec314(1B) to the managing director is concerned, i think it is not applicable to the MD as sec 314(1) specifically does not cover them. As far as this case is concerned i think merely appointment of direcor or managing director in the company does not result in director holding any office or place of profit. I think if any director hold any place or office in company other than the position of director and if he gets the remuneration for holding that place exceeding the limit prescribed under sec 314(1) then it results in to that dirctor holding a place of profit. please correct me if i m wrong.

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srivastava ( c.s) (38 Points)
Replied 27 February 2010

i think you are right Mr. Nilesh

Thank you.

S. Satheesh Kumar (Assistant Company Secretary) (84 Points)
Replied 02 March 2010

Mr. Srivastava, In your case, the Central Government approval is not necessary due to the following reasons. Director is not covered under Section 314(1B). Thus, only special resolution shall be necessary with respect to appointment of a director. Approval of Central Govt shall not be necessary. Section 314(1B) does not exempt appointment to the position of Managing Director, Manager, etc.,. However, in view of Schedule XIII, it may be inferred that the appointment within the parameters of schedule XIII shall not require approval of the CG. The Department of Corporate Affairs has endorsed this view.