Sitting fee to directors and shareholders

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In a private limited company, directors can receive sitting fees for board meetings, with a legal maximum set by the Companies Act, 2013. Shareholders, however, cannot be paid sitting fees; their return is limited to dividends. Any allowances for directors must adhere to these regulations.

SHYAM KRISHNAN K

SHYAM KRISHNAN K (Querist)
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14 September 2024 In private limited company, is it possible to provide allowance to shareholders and directors for board meeting sitting fee. Is there any limit for that

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 September 2024 Sitting fees not allowed for shareholders.
With respect to payment of sitting fees Companies Act, 2013 states the that maximum sitting fee that can be paid to non-executive directors is Rs 100,000 per meeting. Meetings here include all types of committee meetings wherein non-executive directors are comprised of.

SHYAM KRISHNAN K

SHYAM KRISHNAN K (Querist)
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17 September 2024 Is it possible to provide any other allowance to shareholders

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 September 2024 No allowances can be paid to shareholders.
Only dividend can be paid.

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