sitting fees
This query is : Resolved
04 October 2010
Is it necessary to pay sitting fees to all the directors of the Compnany.
Ajay Mishra
(Expert)
04 October 2010
Dear Ms.Priyanka
Section 309 (2) of the Companies Act, 1956 provides that a director may receive remuneration by way of a fee for each meeting of the Board or a committee thereof attended by him. While sitting fee payable to the directors shall not be included in overall maximum limit of 11% of total remuneration payable by a public company to its directors.
Sitting fee may be paid only to a director who is not a managing director or whole time director i.e. sitting fee may be paid to a non-executive director only. {Department Letter No. 3/1/90CL_V, dated 18th August, 1990}.
The provisions of section are not applicable to private limited company, hence, a private company can pay sitting fee as per their requirements.
Regards
CS Ajay Mishra
Section 309 (2) of the Companies Act, 1956 provides that a director may receive remuneration by way of a fee for each meeting of the Board or a committee thereof attended by him. While sitting fee payable to the directors shall not be included in overall maximum limit of 11% of total remuneration payable by a public company to its directors.
Sitting fee may be paid only to a director who is not a managing director or whole time director i.e. sitting fee may be paid to a non-executive director only. {Department Letter No. 3/1/90CL_V, dated 18th August, 1990}.
The provisions of section are not applicable to private limited company, hence, a private company can pay sitting fee as per their requirements.
Regards
CS Ajay Mishra
Ankur Garg
(Expert)
05 October 2010
With reference to your query---no it is not mandatory to pay sitting fees to each n every director on board.
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