17 February 2010
Warm regards to everyone, As per co.s act a pvt. ltd. co. is exempt from the managerial remuneration provisions that are applicable to public ltd. co.s. Can anyone tell me
1. what is the procedure of fixing remuneration of M.D or the other directors in a Limited Co.?
17 February 2010
Total ceiling of managerial remuneration
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.
SITTING FEES A director who is not a managing or whole-time director may be paid sitting fees for attending meetings of the Board or of the committee of directors. Sitting fees paid for attending meeting are excluded from overall managerial remuneration ceiling
The limit of 11% of the net profits on overall maximum managerial remuneration shall be exclusive of any sitting fees payable to directors for attending each meeting of the Board or committee.
REMUNERATION PAYABLE TO MANAGERIAL PERSONNEL BY COMPANY HAVING NO PROFITS OR INADEQUATE PROFITS
Section II of Part II of Schedule XIII to the Companies Act, 1956 relates to remuneration payable to managerial person i.e., a managing or whole-time director or a manager by companies having no profits or inadequate profits.
Following are the worth noting points in regard to payment of remuneration by companies having no profits or inadequate profits for appointment of a managerial person under the provisions of Schedule XIII to the Companies Act, 1956.
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