Directors remunaration
This query is : Resolved
09 August 2016
Dear all,
I am working with Pvt. Ltd. , we have appointed Managing Director as well as Whole Time Director, in our Company . Our Auditors are asking me Special Resolution for appointment of the MD & WTD complying with the provision of Section 188(d).
According to me , we need not require to take any special resolution for payment of normal remuneration to MD & WTD which is in terms of salary for handling the respective position of MD& WTD.
However, How should I convince them that normal remuneration paid to the director does not attract provisions of section 188(d) , according to them remuneration is paid for availing of services.
Is there any clear explanation in any book which states that normal remuneration paid for the services of the director does not attract the provision of the section 188 (d)
I am working with Pvt. Ltd. , we have appointed Managing Director as well as Whole Time Director, in our Company . Our Auditors are asking me Special Resolution for appointment of the MD & WTD complying with the provision of Section 188(d).
According to me , we need not require to take any special resolution for payment of normal remuneration to MD & WTD which is in terms of salary for handling the respective position of MD& WTD.
However, How should I convince them that normal remuneration paid to the director does not attract provisions of section 188(d) , according to them remuneration is paid for availing of services.
Is there any clear explanation in any book which states that normal remuneration paid for the services of the director does not attract the provision of the section 188 (d)
13 August 2016
Auditor must asking this question because MD/WTD might be related to any of the existing director. In case if Related Party is being appointed to any office or place of profit, Section 188 will be attracted.
Kindly ensure, while appointing MD/WTD, whether he was a 'related party' as per definition of Companies Act, 2013 or not.
Kindly ensure, while appointing MD/WTD, whether he was a 'related party' as per definition of Companies Act, 2013 or not.
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