Remuneration to directors

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MUKESH JOSHI (Querist)
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12 August 2019 WHAT ARE THE THINGS WE NEED TO DO IF A PRIVATE COMPANY IS GIVING REMUNERATION TO ONE OF ITS DIRECTOR CUM CHAIRMAN RS. 5 LAKHS P.M. AND OTHER DIRECTORS 2.5 LAKHS AND 1 LAKHS P.M. RESPECTIVELY AND ALL OF THE DIRECTORS ARE RELATIVES.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 August 2019 Such remuneration payments to directors allowed in private limited companies. You can't do anything.

MUKESH JOSHI

MUKESH JOSHI (Querist)
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12 August 2019 Thanks sir, so in this case whether Section 188 of the CA, 2013 will not be applicable to private companies as all of the Directors are relatives.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 August 2019 Applicable but approval of the board is required. No problem in obtaining approval.

MUKESH JOSHI

MUKESH JOSHI (Querist)
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12 August 2019 THANKS SIR, BUT ONE OF THE VERY SENIOR MEMBER IS INSISTING ME THAT ITS REQUIRED TO PASS SPECIAL RESOLUTION FOR THE SAME AS ITS COME UNDER DEFINITION OF "PLACE OR PROFIT" U/S 188(1)(F) AND THERE IS NO EXEMPTION FOR PRIVATE COMPANIES REGARDING THIS.