directirs remuneration
This query is : Resolved
ajay arora
(Querist)
07 August 2010
a person is appointed as managing director in two different Companies and intend to draw remuneration in both the Companies, How his remuneration ( with limits as per schedule XIII)would be decided in both the Companies
can a person be a managing director of the company without getting any remuneration from it.
can a person be a managing director of the company without getting any remuneration from it.
07 August 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.
But this provision is not applicable to a Pvt Ltd Company which is not a subsidiary of a Public Limited company.
The remuneration will be decided by company applying sec. 198 separately. subject to this there is no other restriction. If yours is a pvt ltd company then no restriction at all. Both company will decide separately. It does not matter to a company what the other company, in which he is a managing director, pays him.
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.
But this provision is not applicable to a Pvt Ltd Company which is not a subsidiary of a Public Limited company.
The remuneration will be decided by company applying sec. 198 separately. subject to this there is no other restriction. If yours is a pvt ltd company then no restriction at all. Both company will decide separately. It does not matter to a company what the other company, in which he is a managing director, pays him.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Oct 2025 Invoices
- Under marginal scheme
- Import of Software Service.
- Clarification Requested: Gift → NRO → NRE → Overseas Transfer - USA/CANDA (FEMA & Tax Compliance)
- GST on Renting godown to KFCSC for Storage of Raagi
- How to Handle Active E-Invoices in GST Portal Deleted from Tally?
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
