Salary to directors

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 October 2013 In a pvt. ltd. one of the director was getting salary of rs. 60,000/- pm. in FY 2012-13 and from FY 2013-14 he is getting salary of 75,000/- pm from the company. now company again wants to enhance his salary by 25000/- i.e. total 100000/-pm from october'2013 . my question is that -
* is thr any problm in doing this by passing a resolution for the same?

* what is the maximum limit for the salary of the directors?

* is thr any limit for the salary of the directors with regard to percentage of profit?

Ajay Mishra

Ajay Mishra (Expert)
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10 October 2013
Hi

The provisions of Companies Act, 1956 and Schedule XIII deal with remuneration of director will not applicable to private limited company. Such provision is applicable only public company and its subsidiary.

The remuneration of directors of the private company is totally governed by their company articles. If the Company’s article permits to pay remuneration you can give remuneration without any restriction. For this you will pass a Board Resolution for payment of remuneration.

There is no restriction under Companies Act, 1956 on relation to directors of private company. You are free to pay.

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