Remuneration of directors

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khushboo nangalia

khushboo nangalia (Querist)
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24 November 2008 What is the limit as per Sec 309 of Companies Act for payment of remuneration to directors

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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24 November 2008 As per section 309 of Co. Act, Remuneration payable to a Director shall be determined as per the provision mentoned in Sec.198 and if the Articles of the Co.requires so then it should be passed by a special resolution in the general meeting of the com.

As per section 198 the total managerial remuneration cannot exceed 11% of the net profits computed in the manned laid down in section 349.

CS Vivek Hegde

CS Vivek Hegde (Expert)
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10 December 2008 Hi

further to the above reply i would like to add some more.

Above criteria is for the companies having profits. If the company does not hav any profit the criteria is EFFECTIVE CAPITAL of the company.

You have to fulfill the provisions of the Schedule XIII of the CA 1956.

The limit is fixed based on the effective capital.

rgds

Vivek

CS Vivek Hegde

CS Vivek Hegde (Expert)
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