Managerial remuneration

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Querist : Anonymous

Querist : Anonymous (Querist)

17 July 2013 there is ceiling for managerial remuneration for public companies. but pvt companies are not subject to pay according to provisions of section 269 and schedule XIII.

so if a person is managing director in a public company and a private co. what will be his total remuneration???

he can draw remuneration without any ceiling from a private company???

Ajay Mishra

Ajay Mishra (Expert)
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17 July 2013 Hi

Maximum remuneration payable to managerial person in case he is a managerial personnel in two companies
Section III of Part II of Schedule XIII to the Companies Act, 1956 inter alia provides that the total remuneration which can be paid by two companies in which an individual is a managerial person shall not exceed the higher maximum limit admissible from any one of the companies of which he is a managerial person. It is to be noted that Section III is also subject to the provisions of Sections I and II.
As per Press Note No. 2/96, dated 16-9-1996 issued by the Department of Company Affairs vide F. No. 1/18/96-CL V inter alia provides that a person who is a managerial person in more than one company shall be able to draw remuneration from one or both the companies.
For making payment to a managerial person from two companies, the following steps are to be taken:—
(i) ascertain that which of the following two sections is applicable to both the companies of which one common individual is a managerial person;
Section I — Remuneration payable by companies having profits.
Section II — Remuneration payable by companies having no profits or inadequate profits.
(ii) working out of maximum remuneration which can be paid to the managerial person by each company separately, the higher of above two maximum limits will be the ceiling on total maximum remuneration which can be paid to such managerial person by both companies taken together.

Querist : Anonymous

Querist : Anonymous (Querist)

17 July 2013 thank you sir for immediate reply...

but can u clarify about private companies??/

what will be his total remuneration from a pvt and public companies???

Ajay Mishra

Ajay Mishra (Expert)
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17 July 2013 The provision of remuneration and section 269 and Schedule XIII is not applicable to private limited company, unless it is subsidiary of public company.

Querist : Anonymous

Querist : Anonymous (Querist)

17 July 2013 so a managing director of pvt company can draw remuneration of any amount???

Ajay Mishra

Ajay Mishra (Expert)
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17 July 2013 Yes, but subject to the articles provisions. Check your pvt. co. articles about remuneration.

Querist : Anonymous

Querist : Anonymous (Querist)

17 July 2013 okay
thank u very much sir..

Ajay Mishra

Ajay Mishra (Expert)
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17 July 2013 My Pleasure