profit sharing in pvt ltd co
This query is : Resolved
24 November 2009
Dear Expert,
There are 4 member in a pvt co. Out of 4, 2 members are investors and another 2 members are working members. They want to share p&l equally. But the investors dont want to issue shares to the working members. How it can be dealt? Can the working members be given remuneration to the extent of 50% of profit? Is there any maximum limit in giving remuneration to executive directors in pvt co?
There are 4 member in a pvt co. Out of 4, 2 members are investors and another 2 members are working members. They want to share p&l equally. But the investors dont want to issue shares to the working members. How it can be dealt? Can the working members be given remuneration to the extent of 50% of profit? Is there any maximum limit in giving remuneration to executive directors in pvt co?
HUZAIFA HUSSAIN
(Expert)
24 November 2009
Since it is a private limited company there is no restrictions on Directors remuneration. However it should be either fixed amount or percentage based on turnover, etc.
25 November 2009
Provisions of companies act regarding director's remmuneration does not apply to a private limited company.
So there is no limit in giving remmuneration to executive directors in a pvt co.
So there is no limit in giving remmuneration to executive directors in a pvt co.
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