Directors remuneration from more that one companies

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 September 2013 WHETHER IT IS POSSIBLE THAT ONE PERSON (DIRECTOR) IS RECEIVING DIRECTORS REMUNERATION FROM MORE THAN ONE COMPANIES.

SUGGEST ON THE MATTER---

IS THERE ANY LEGAL ISSUE ON THE SAME BECAUSE IN OUR COMPANY WE ARE GIVING DIR. REMUNERATION FROM OUR TWO COMPANIES..

Ajay Mishra

Ajay Mishra (Expert)
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11 September 2013 Yes, you can take remuneration from more than one company.

Please confirm, it is public company or private limited company.

Querist : Anonymous

Querist : Anonymous (Querist)

15 September 2013 Private Co.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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21 July 2024 Yes, it is possible for one person (director) to receive director's remuneration from more than one company simultaneously. This is quite common, especially if the director serves on the boards of multiple companies. However, there are several considerations and legal provisions that must be adhered to:

1. **Companies Act, 2013**:
- **Limits on Remuneration**: The Companies Act, 2013 provides guidelines and limits on the remuneration payable to directors, particularly in Schedule V for private companies. Ensure that the total remuneration paid to a director from all companies complies with these limits.
- **Board Approval**: The remuneration should be approved by the Board of Directors of each company through a resolution. The resolution should detail the terms of remuneration, including salary, perquisites, allowances, etc.

2. **Disclosure Requirements**:
- **Board Meetings**: Any potential conflicts of interest or related party transactions involving directors' remuneration should be disclosed and discussed at board meetings.
- **Related Party Transactions**: Transactions between the companies and their directors are considered related party transactions and should comply with the provisions of the Companies Act, 2013 and relevant rules.

3. **Shareholder Approval**:
- **General Meeting**: For public companies, certain transactions including the appointment and remuneration of directors may require approval of shareholders in a general meeting. Private companies may have similar requirements depending on their articles of association.

4. **Tax Implications**:
- **Tax Deduction**: The companies are required to deduct TDS (Tax Deducted at Source) on the remuneration paid to directors as per the Income Tax Act, 1961. Directors should ensure that they comply with income tax laws regarding declaration and payment of taxes.

5. **Regulatory Compliance**:
- **Registrar of Companies**: File necessary forms (e.g., Form DIR-12) with the Registrar of Companies to notify them of any changes in directorship, including appointments and resignations.

### Conclusion:
While it is permissible for a director to receive remuneration from more than one company, it is essential to ensure compliance with legal and regulatory requirements, including those under the Companies Act, 2013 and the Income Tax Act, 1961. This includes obtaining approvals from the board of directors and shareholders where required, adhering to limits on remuneration, and fulfilling disclosure obligations. It's advisable to consult with a legal or financial advisor to ensure all necessary compliances are met specific to your situation.

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