Remuneration limit for directors

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Hitesh Patel (Querist)
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18 February 2012 Sir/Meam,

If there is 6 Director & 1 WTD than what will be the max remuneration % of net profit for 6 Director and 1 WTD...?

CA Sumat Singhal

CA Sumat Singhal (Expert)
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18 February 2012 TOTAL CEILING OF MANAGERIAL REMUNERATION
1. Section 198(1) limits the overall maximum managerial remuneration. The total managerial remuneration payable by a public company or a private company which is a subsidiary of a public company, to its directors and its manager in respect of any financial year shall not exceed 11% of the net profits of the company for that financial year. 2. Net profits shall be computed in a manner laid down under sections 349 and 350, except that the remuneration of the directors shall not be deducted from the gross profits. 3. However such limit is exclusive of the sitting fee payable to the directors for attending the Board meeting. For the purpose of remuneration, Directors may be classified as executive and non executive directors

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Ajay Mishra

Ajay Mishra (Expert)
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18 February 2012 Hi

The total manegerial remuneration payable by public company to its directors and manager in respect of financial year shall not exceed 11% of the net profit of the company for that financial year computed in the manner laid down in section 198(1).

Remuneration payable to a managing director or WTD shall not exceed 5%of the net profit for one such director and if there is more than one such director, 10% for allof them together.

In your case it will be 5% of the net profit.

Regards

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Guest

Guest (Expert)

18 February 2012 1% commission of net profit also you can pay to rest 5 directors (other than WTD) U/S 309 (4) by passing SR for a period of 5 yrs.

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