Sitting Fee [ Section 310 ]

MINISTRY OF FINANCE

(DEPARTMENT OF COMPANY AFFAIRS)

NOTIFICATION

New Delhi, the,  24^th    July, 2003

     G.S.R. 580(E) .-  In exercise of the powers conferred by sub-section (1) of section 642 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Companies (Central Government's) General Rules and Forms, 1956, namely:-

1.               (1) These rules may be called the Companies (Central Government's) General Rules and Forms (Third Amendment) Rules, 2003.

(2) They shall come into force on the date of their publication in the Official Gazette.

2.           In Companies (Central Government's) General Rules and Forms, 1956, for rule 10-B, the following shall be substituted, namely :-

"10-B Section 310 - For the purposes of the first proviso to section 310, the amount of remuneration by way of fee for each meeting of the Board of directors or a committee thereof, shall be as under:

(a)	Companies with a paid-up share capital and free reserves of Rs.10 crore and above or turnover of Rs.50 crore and above	Sitting fees not to exceed the sum of twenty thousand rupees
(b)	Other companies	Sitting fees not to exceed the sum of ten thousand rupees

"

Directors or Relative holding Office or Place of Profit (Sec 314)

In a Nut shell lets us see Sec 314 of the Act read with Director’s Relative (Office or Place of Profit) Rules 2011:

Applicability: It applies to both Directors and Relative of Directors of any kind of companies

Gist of the Section:

Section	Remuneration Limit	Procedure involved
Sec 314	Upto Rs. 20,000	Prior Board Approval is sufficient
Sec 314 (1)	Rs. 20,000 – Rs. 50,000	Prior Board Approval and Share holders approval in the ensuing General Meeting
Sec 314 (2)	Rs, 50,000 – Rs, 2,50,000	Prior Board Approval and Share Holders Approval and the Increase in the limit would be valid subject to Central Government Approval
Sec 314 (2)	Above Rs. 2,50,000	Prior Board Approval, Share Holders Approval and Central Government Approval

Violation of the Section:

-         Sec 314 (1): The relative has to vacate the office in the ensuing General Meeting.

-         Sec 314 (2): He’ll further have to refund all the amount received as remuneration from the Company. and has to vacate the office immediately