Directors' remuneration in case of unlisted public company

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Guest

Guest (Querist)

22 June 2013 Dear Experts

i am confused regarding Directors' remuneration in case of Private company and Public company ( listed and Unlisted both)

what are the advantages and disadvantages if as a director I am about to incorporate Unlisted public company or Private comapny ?

What should be preferable Unlisted public company or Private company ?

so please guide me therefor
thanks in advance

Ajay Mishra

Ajay Mishra (Expert)
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22 June 2013 Hi

The provisions of Companies Act, 1956 regarding remuneration of directors is not applicable to private limited company, it will be totally governed by its company's articles.

Section 198(1) relates to overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits. The total managerial remuneration payable by a public company or a private company which is a subsidiary of a public company, to its directors and its manager in respect of any financial year shall not exceed 11% of the net profits of the company for that financial year. Such net profits shall be computed in a manner laid down under sections 349 and 350, except that the remuneration of the directors shall not be deducted from the gross profits.

Remuneration is payable to all the directors including managing and whole-time directors and in any capacity. Therefore, it includes the remuneration for services rendered by him in any other capacity other than that of a director.

Rupesh Jain

Rupesh Jain (Expert)
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22 June 2013 ABOVE ANSWER IS OK

Guest

Guest (Querist)

22 June 2013 thanks a lot sir ,

but my question is still open sir ,

I want to know
what should be preferable unlisted public company or Private limited company .......

please guide me

Rupesh Jain

Rupesh Jain (Expert)
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22 June 2013 d/sir

many provisions are extra from pvt ltd co. due
public co or unlisted public are not diff.
it is same provision for both company.
like that director remundration in pvt ltd no provison
butin public co it is not more than 11% of the company profit.

subscriber in public is 7 in pvt only 2
director in pvt ltd 2 in public co 3

pvt ltd is better.

Guest

Guest (Querist)

22 June 2013 okay Ajay and Rupesh sir ,

thanks sir thanks a ton

Ajay Mishra

Ajay Mishra (Expert)
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22 June 2013 My Pleasure...........