(1) No managing agent, and no associate of a managing agent, shall receive any payment whatever, from the company except expenses if any, sanctioned under section 354 in respect of purchases of goods made on its behalf either in India, or in cases to which sub-section (2) does not apply, outside India.

(2) Where purchases of goods are made on behalf of a company by its managing agent or any associate of its managing agent, at any place outside India, then, if the managing agent or associate maintains an office at such place not only for such purchase but also for his own business that is to say, for a business not connected with that of the company, or any other company managed by the managing agent, he may receive, at the option of the company, either -

(a) such part of the expenses of such office as may reasonable be attributed to the purchases made on behalf of the company as aforesaid, or

(b) remuneration, by way of commission or otherwise, in respect of the work done by the managing agent or associate in making such purchases.

(3) in cases to which clause (a) sub-section (2) applies, the maximum amount which may be paid to the managing agent shall be specified in a special resolution passed by the company; and in cases to which clause (b) of that sub-section applies, the remuneration payable to the managing agent or associate shall be in accordance with the terms of a special resolution, passed by the company in that behalf.

(4) The special resolution referred to in sub-section (3) shall set out in sufficient detail the nature of the office maintained by the managing agent or associate outside India, the purposes for which it is maintained, the scale of its operations, the expenses incurred in maintaining the office, and the proportion of those expenses which may be reasonable attributed to the work done on behalf of the company.

(5) The special resolution shall not remain in force for a term exceeding three years but may be renewed from time to time for a term not exceeding three years on each occasion :

Provided that no renewal shall take place earlier than one year from the date on which it is to come into force.