Directors remuneration in form of Professional fee
08 April 2020
I have a private limited company, wherein there are 2 directors who are even shareholders for the same. They are not receiving any remuneration by way salary for the year. At the end of financial year, they are willing to charge consultancy fee for the period.
share capital being 1 lakh and consultancy fee being 10lk
Can you help me out if any restrictions are there on payment of consultancy charges.
Is any resolution required to be passed for the same.?
If yes, under which section it is applicable?
09 April 2020
No restriction for private limited company refer section 197 of companies act.
10 April 2020
This is a related party transaction, please refer to section 188 of the Companies Act