WILL A DIRECTOR WILL GET A SITTING FEE FOR THE SAME MEETING IN WHICH HE HAS BEEN APPOINTED AS MANAGING DIRECTOR?
Arvind Sharma
(ACA)
(1432 Points)
Replied 10 June 2011
very good qus...
agree with above ans...
This is because, Directors are prohibited to participate in business in which they have Interest (u/s 300 of the Companies Act) .
Accordingly, Since the meeting is for appointment as MD of a Director, the Director will considered to be a participants and so he will not entitled to sitting fee...
This is my reasoning....
rachit jain
(chartered accountant )
(635 Points)
Replied 10 June 2011
if board meeting is only for the purpose of appointing him as a MD then he will not eligible as per sec 300 but if other business were also transact then he will be very much eligible for sitting fee.
Aparna Raja K.C
(Student)
(520 Points)
Replied 10 June 2011
| Originally posted by : Arvind | ||
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very good qus... agree with above ans... This is because, Directors are prohibited to participate in business in which they have Interest (u/s 300 of the Companies Act) . Accordingly, Since the meeting is for appointment as MD of a Director, the Director will considered to be a participants and so he will not entitled to sitting fee... This is my reasoning.... |
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Agree..
more over.. if any other business was transacted in that meeting, and that too subsequent to appointment of MD... he will be eligible for sitting fee...
because even his opinion or vote will be considered while reaching a conclusion :) < i guess it to be so>
siva sankar reddy
(chartered accountant)
(104 Points)
Replied 11 June 2011
yes,he is elegible for sitting fee,provided the meeting should also cover othe agenda also,otherwise it's not so.
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 11 June 2011
In my opinion he is liable for sitting fees.
Sitting fees is given to non executive directors of the company who attended the meeting and if the director attended the meeting he is entiled for sitting fees.
Section 300 does not have any thing to do with sitting fees.
If the director is present in the meeting for the purpose to participate in the proceedings in the meeting The sitting fees is payable to him whether no business could be transacted at that meeting. This has been clarified vide circular no. 1 of 1972 dated 2-2-1972.
CA Trinath Galla
(student)
(3130 Points)
Replied 12 June 2011
| Originally posted by : rachit jain | ||
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if board meeting is only for the purpose of appointing him as a MD then he will not eligible as per sec 300 but if other business were also transact then he will be very much eligible for sitting fee. |
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CS,CA F,Numrologi TusharSampat
(CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert)
(85930 Points)
Replied 12 June 2011
| Originally posted by : Aparna Raja K.C | ||
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Originally posted by : Arvind very good qus... agree with above ans... This is because, Directors are prohibited to participate in business in which they have Interest (u/s 300 of the Companies Act) . Accordingly, Since the meeting is for appointment as MD of a Director, the Director will considered to be a participants and so he will not entitled to sitting fee... This is my reasoning.... Agree.. more over.. if any other business was transacted in that meeting, and that too subsequent to appointment of MD... he will be eligible for sitting fee... because even his opinion or vote will be considered while reaching a conclusion :) < i guess it to be so> |
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AGREED.
CA,CMA,CS Karan Gogia
(Employed)
(230 Points)
Replied 12 June 2011
CS ANKUR.....u r right....i fully agree....
i dont understand y people r dicussing sec 300 with sitting fee.....these two r entirely different provisions...
M.D and whole time director is not entitle to sitting fee.....
only non excutive director is entitled...
any query???
CA SHUBHAM Mittal
(CA )
(441 Points)
Replied 12 June 2011
MD and WTD r never entitle to sitting fee and if they get it would be considered as remuneration .............................
rahul
(Chartered Accountant)
(5570 Points)
Replied 12 June 2011
ANKUR Sir .....u r right....i fully agree....
rachit jain
(chartered accountant )
(635 Points)
Replied 12 June 2011
firstly At the initiation of meeting he is not an executive director he is an non executive director. he will be an executive director from the time of his appointment not before.
secondly M.D and WTD are eligible for sitting fee if AOA provides.
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