hello, Guarantee Commission: Section 309[1] provides that the remuneration payable to any director shall be inclusive of the remuneration payable for services rendered by him in any other capacity. The question is whether the guarantee commission is a remuneration is within the meaning of section 309. It was held in Suessen Textile Bearing Ltd v. Union of India [(1984) 55 (Comp. Cases 492, 496, 497)] that the guarantee commission paid to directors for giving surety against loans or credit facilities taken by the company from financial institution is not a remuneration for within the meaning of section 309 and therefore, approval of the Central Government is not necessary. The director giving guarantee does not render manual, clerical, technical, supervisory or administrative service. He gets the commission for the risk which he bears and that has nothing to do with his directorship. Hence the payment of guarantee commission is in order.

Guarantee Commission: Here, the question that arises is whether the guarantee commission is “”remuneration” under the Act. It was held in Suessen Textile Bearings Ltd v. Union of India [(1984) 55 (Comp. Cases 492, 496, 497)] that the guarantee commission paid to directors for giving surety against loans or credit facilities taken by the company from financial institution is not a remuneration for within the meaning of section 309 of the earlier Companies Act, 1956 and therefore, approval of the Central Government is not necessary. The director giving guarantee does not render manual, clerical, technical, supervisory or administrative service. He gets the commission for the risk which he bears and that has nothing to do with his directorship. Hence the payment of guarantee commission is in order.

**Guarantee Commission:** Here, the question that arises is whether the guarantee commission is “”remuneration” under the Act. It was held in Suessen Textile Bearings Ltd v. Union of India [(1984) 55 (Comp. Cases 492, 496, 497)] that the guarantee commission paid to directors for giving surety against loans or credit facilities taken by the company from financial institution is not a remuneration for within the meaning of section 309 of the earlier Companies Act, 1956 and therefore, approval of the Central Government is not necessary. The director giving guarantee does not render manual, clerical, technical, supervisory or administrative service. He gets the commission for the risk which he bears and that has nothing to do with his directorship. Hence the payment of guarantee commission is in order. Considering the above, it may be concluded that the guarantee commission paid to the directors for guarantee provided on loan from a financial institution is valid.