Appt of md in public co (sch xiii)

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Guest

Hi,

 

We are appointing 2 Managing Director in a public company in Jan 2012 in Board meeting suject to approval of shareholders in GM (proposed to be held in Feb. 2012) as per the provisions of Schedule XIII.

 

My doubt is :

 

In case profits are not adequate for F.Y. 2011-2012, and consequently remumeration payable to both MD exceeds 10% of net profit of company as per section 198. Then do we require to again pass ordinary resolution in general meeting or we can pay remuneration exceeding 10% on the strength of this point in our board resolution :

 

Minimum Remuneration:

 

In the event of absence or inadequacy of profits in any financial year, the remuneration payable to Managing Director shall be Rs. 2,00,000/- per month or such higher amount as may be permitted under the Companies Act, 1956 but not exceeding the ceiling as specified under Section II of Part II of Schedule XIII to the Companies Act, 1956, as amended for the time being in force.

 

Query is urgent and needs your immediate replies!

 

Thanks all in anticipation.

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On 21 January 2012 at 18:38 Report
Replies (10)
Guest

Hello All,

 

Pls reply to my query asap.

 

Thanks.

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On 23 January 2012 at 18:50
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Company Secretary
17139 Points Joined January 2009
Remuneration payable in the event of absence or inadequacy of net profit during any financial year shall be governed by Section II of Part II of Schedule XIII. In case if remuneration paid is not in accordance with Section II of Part II of Schedule XII, Central Govt approval would be required u/s 198(4) and 309(3)of the Companies Act.
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On 24 January 2012 at 12:48
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Company Secretary
17139 Points Joined January 2009
Remuneration payable in the event of absence or inadequacy of net profit during any financial year shall be governed by Section II of Part II of Schedule XIII. In case if remuneration paid is not in accordance with Section II of Part II of Schedule XII, Central Govt approval would be required u/s 198(4) and 309(3)of the Companies Act Alternatively, remuneration will have to be scaled down appropriately.
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On 24 January 2012 at 12:54
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Company Secretary
17139 Points Joined January 2009
Remuneration payable in the event of absence or inadequacy of net profit during any financial year shall be governed by Section II of Part II of Schedule XIII. In case if remuneration paid is not in accordance with Section II of Part II of Schedule XII, Central Govt approval would be required u/s 198(4) and 309(3)of the Companies Act Alternatively, remuneration will have to be scaled down appropriately.
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On 24 January 2012 at 12:59
Guest
Originally posted by : mitesh
Remuneration payable in the event of absence or inadequacy of net profit during any financial year shall be governed by Section II of Part II of Schedule XIII.

In case if remuneration paid is not in accordance with Section II of Part II of Schedule XII, Central Govt approval would be required u/s 198(4) and 309(3)of the Companies Act Alternatively, remuneration will have to be scaled down appropriately.
 


Agree with you Mitesh 100%.

In my case, Remuneration paid is in accordance with Section II of Part II of Schedule XII, and hence Central Govt approval would not be required u/s 198(4) and 309(3)of the Companies Act.

If on the safer side, I however want to pass general meeting resolution (EOGM) for paying remuneration exceeding 10% then, in which GM (month) we should pass this resolution suppose our accounts got finalised in the month of Sept 2012 ?

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On 25 January 2012 at 18:04
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Company Secretary
17139 Points Joined January 2009
The different ceiling limits provided in Schedule XIII are based on the effective capital of the company. The effective capital is to be calculated as on the last date of the financial year immediately Preceding the financial year in which the appointment is made.
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On 27 January 2012 at 12:52
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Company Secretary
17139 Points Joined January 2009
The different ceiling limits provided in Schedule XIII are based on the effective capital of the company. The effective capital is to be calculated as on the last date of the financial year immediately Preceding the financial year in which the appointment is made.
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On 27 January 2012 at 12:54
Guest
Originally posted by : mitesh
The different ceiling limits provided in Schedule
XIII are based on the effective capital of the
company.

The effective capital is to be calculated as on the last date of the financial year immediately Preceding the financial year in which the appointment is made.
 

 

Thanks a lot for your reply Mitesh Jee.

 

My query is :

 

If on the safer side, I however want to pass general meeting resolution (EOGM) for paying remuneration exceeding 10% for FY 2011-2012,  then, in which GM (month) we should pass this resolution suppose our accounts got finalised in the month of Sept 2012 ?

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On 27 January 2012 at 12:58
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Company Secretary
17139 Points Joined January 2009
Dear Neha, you can the pass the resolution before sept 2012 on the basis of proforma accounts
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On 27 January 2012 at 14:24
Guest
Thanks a lot mitesh
Reply
On 27 January 2012 at 14:34


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