Sec 197 &198 of companies act2013

This query is : Resolved

Report Abuse Follow Query Ask a Query

Querist : Anonymous

Querist : Anonymous (Querist)

31 January 2015 please describe me conditions on 10% and 11% managerial remuneration u\sec197,198 companies act 2013 ?

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
Follow

02 February 2015 Section 197 of the Companies Act, 2013 prescribed the maximum ceiling for payment of managerial remuneration by a public company to its managing director whole-time director and manager which shall not exceed 11% of the net profit of the company in that financial year computed in accordance with section 198 except that the remuneration of the directors shall not be deducted from the gross profits.

Further, the company in general meeting may, with the approval of the Central Government, authorise the payment of remuneration exceeding 11% of the net profits of the company, subject to the
provisions of Schedule V.

The remuneration payble to any one managing director or wholetime director or manager shall not exceed 5% of the net profits of the company and if there are more than one such director remuneration shall not exceed 10% of the net profits to all such directors and manager taken together.

Except with the approval of the company in general meeting, the remuneration payable to directors who are neither managing directors nor whole-time directors shall not exceed,—
— 1% of the net profits of the company, if there is a managing or whole-time director or manager;
— 3% of the net profits in any other case.
The percentages aforesaid shall be exclusive of any fees payable to
directors for attending the meeting of the board/committees or for such other purposes as decided by the board.

Message likes : 1 times