What is Payment to director for loss of office, etc., in connection with transfer of undertaking, property or shares Section 191 of Indian Companies Act 2013
Payment to director for loss of office, etc., in connection with transfer of undertaking, property or shares is defined under Section 191 of Indian Companies Act 2013. Provisions under this section is:
Section 191 of Indian Companies Act 2013 "Payment to director for loss of office, etc., in connection with transfer of undertaking, property or shares"
(1) No director of a company shall, in connection with -
(a) the transfer of the whole or any part of any undertaking or property of the company; or
(b) the transfer to any person of all or any of the shares in a company being a transfer resulting from -
(i) an offer made to the general body of shareholders;
(ii) an offer made by or on behalf of some other body corporate with a view to a company becoming a subsidiary company of such body corporate or a subsidiary company of its holding company;
(iii) an offer made by or on behalf of an individual with a view to his obtaining the right to exercise, or control the exercise of, not less than one-third of the total voting power at any general meeting of the company; or
(iv) any other offer which is conditional on acceptance to a given extent, receive any payment by way of compensation for loss of office or as consideration
for retirement from office, or in connection with such loss or retirement from such company or from the transferee of such undertaking or property, or from the transferees of shares or from any other person, not being such company, unless particulars as may be prescribed with respect to the payment proposed to be made by such transferee or person, including the amount thereof, have been disclosed to the members of the company and the proposal has been approved by the company in general meeting.
(3) If the payment under sub-section (1) or sub-section (2) is not approved for want of quorum either in a meeting or an adjourned meeting, the proposal shall not be deemed to have been approved.
(4) Where a director of a company receives payment of any amount in contravention of sub-section (1) or the proposed payment is made before it is approved in the meeting, the amount so received by the director shall be deemed to have been received by him in trust for the company.
Punishment for violation of Section 191 of Companies act 2013 regarding payment to director for loss of office in connection with transfer of undertaking property or shares.
(5) If a director of the company contravenes the
provisions of this section, such director shall be
punishable with fine which shall not be less than
twenty-five thousand rupees but which may extend to one lakh
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