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Discussion > Corporate Law > Pvt ltd >

limit on Director salary in Private Limited Company

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student

[ Scorecard : 67]
Posted On 05 January 2009 at 08:09 Report Abuse

Dear Sir

Wish you very happy & prosperous new year.

Sir i have a query about directors salary in a private limited company.

1) Is there any limit on Director Salary in a Private limited company by Company act? or any amount of salary we could pay to Directors.

2.) Whether it is necessary to pay salary to all  the directors in a Private limited company ?

 

Thanking You



Total thanks : 1 times

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Rahul
Company Secretary & Manager-Legal

[ Scorecard : 216]
Posted On 05 January 2009 at 11:09

Hii

Sch. XIII is not applicable to Pvt. companies, hence there is no limit on extent of directors' remuneration.

its also not mandatory to pay any remuneration to directors and it can well be NIL (even for MD/WDs also)



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Shanthi
Junior Student

[ Scorecard : 93]
Posted On 06 January 2009 at 09:47

Hello

Private Limited Company

1) Director's salary

2) IF for example the Director is also a skilled web designer who assists every project of the company.. Can the Director be paid an additional salary ? i.e can a director hold the position of Senior Web Designer in the Company ?

3) How many private limited company can a SINGLE person be a director of ?

Shanthi

 

 

 



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Pallavi
Senior Accountant

[ Scorecard : 25]
Posted On 13 June 2009 at 16:16

Hai

we are entering into a private limited company from the following month from propritorship concern, suggest me wat is the procedure for the salaried persons, whether any agreement should be placed over them




Pallavi
Senior Accountant

[ Scorecard : 25]
Posted On 13 June 2009 at 16:17

 

what is the procedure of accounting of excise and sales tax document with respect to private limited company




Neha Jain
Company Secretary

[ Scorecard : 7327]
Posted On 13 June 2009 at 18:05

 

Kind Attn Mr. Rathindra,

Directors salary in private limited company is goverened by the provisions of Section 314 of the Companies Act, 1956.

According to which you can pay only Rs. 50000 per month without obtaining prior approval of Central Government.

In my opinion maximum Rs. 50000/- per month can be paid to a director without obtaining prior approval of CG. Beyond which you have to obtain approval of CG.

 

Regards

Neha




Sweta jain
CS

[ Scorecard : 51]
Posted On 30 June 2009 at 13:18

A single person can be a Director of not more than 15 companies which includes only public co. and private co.'s which are a subsidiary of any public co.




Shanthi
Junior Student

[ Scorecard : 93]
Posted On 30 June 2009 at 13:27

But all that has changed already

 

151. In section 314 of the principal Act,—
(a) for sub-section (1), the following sub-section shall be substituted, namely:—
“(1) Except with the consent of the company accorded by a special resolution,—
(a) no director of a company shall hold any office or place of profit, and
(b) no partner or relative of a director or manager, no firm in which, a director, manager or a relative of a manager, director, is a partner, no private company of which a director, a manager is a director or member, and no director or manager of such a private company, shall hold any office or place of profit carrying a total monthly remuneration of such sum as may be prescribed , except that of managing director or manager, banker or trustee for the holders of debentures of the company,—
(i) under the company; or
(ii) under any subsidiary of the company,
unless the remuneration received from such subsidiary in respect of such office or place of profit is paid over to the company:
Provided that it shall be sufficient if the special resolution according the consent of the company is passed at a general meeting of the company held for the first time after the holding of such office or place of profit:
Provided further that the appointment of a relative of a person holding more than two per cent. of the equity of the company or the relative of any director of the company, shall require the approval of the Central Government if the remuneration exceeds such sums or such percentage of profits or turnover as may be prescribed.
Explanation.—For the purposes of this sub-section, a special resolution according consent shall be necessary for every appointment in the first instance to an office or place of profit and to every subsequent appointment to such office or place of profit on a higher remuneration not covered by the special resolution, except where an appointment on a time scale has already been approved by the special resolution.
(b) sub-section (1B) shall be omitted;
(c) sub-sections (2A), (2B), (2C) and (2D) shall be omitted;
(d) after sub-section (4), the following sub-section shall be inserted, namely:—
“(5) This section shall not apply to a private company unless it is a subsidiary of public company.”. 

 




Shanthi
Junior Student

[ Scorecard : 93]
Posted On 30 June 2009 at 13:33

Also  I am still eagerly awaiting to hear an answer to my question

Suppose  a director of a company is ALSO the senior most web designer for a company and day to day operations cannot be completed without his expertise ..

Can

1) The  director be paid director fees ?

2) IN addition can he be paid a salary for his web designer services also ?


Shanthi




Malav Shah
Company Secretary and AVP Legal

[ Scorecard : 171]
Posted On 30 June 2009 at 17:54

Dear Shanthi

In your case, you can pay remuneration to the Director without any limit in the capacity as Director. But incase you want to pay fees as web designor then sec 314 will apply. As this remuneration will not be in the capacity of Director. See defination of Holding of office or place of profit.

Regards

Malav Shah



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