Salary to director of pvt ltd company

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Querist : Anonymous

Querist : Anonymous (Querist)

24 June 2012 Hi, is there any limit on payment of salary to the directors of a pvt limited company? If yes, what is the limit?

Secondly, are there any additional conditions as per the companies act which needs to be complied to before payment of salary to the directors of the pvt ltd company?

Kindly advise.

Regards.

CS Suraj Arora

CS Suraj Arora (Expert)
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25 June 2012 There is no limit on Salary to be given to Director in Private Limited Company.

Further, In public Ltd there is different Scenario.

No Conditions are there in the Companies Act 1956 regarding Salaries to be given of a private Ltd Company's Directors except necessary resolutions and all.

One more thing i would like to share with you dear friend it is not necessary that every thing should be written in Act in itself.Look Generally Shareholders are the ultimately owners of the Company and as in private Limited no outside fund is involved then No Other authority has any problem while Pvt Ltd Company's are giving Crores of rs as Salary to any of its Directors.

But again that must be in the four Corner of Definition of salary meaning thereby not for any other professional or Consultancy fees.

Regards
Suraj Arora

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Ajay Mishra

Ajay Mishra (Expert)
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25 June 2012 Hi

As per your information the provision of Companies Act, 1956 deal with Schedule XIII will not apply to private limited company. So they are free to pay any amount subject to your company's articles.

The payment of salary to directors of private limited company is govern by its articles.

Regards

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