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Directors remuneration u/s 198 & 199

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Querist : Anonymous

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Querist : Anonymous (Querist)
17 July 2013 Hi
Our company is public limited company. We have paid remuneration to Managing Director more than 20% of company's profit.

Can any one advice that waht will be adverse implication due to this and what steps company should take in future for not viloting sec 198 of the companies act.
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Ajay Mishra

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Ajay Mishra (Expert)
18 July 2013 Hi

You can not pay remuneration more than 5% to MD without Central Government approval.

So please read section 198 with 309 of the Companies Act, 1956.
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