Directors remuneration

Hi, Our's is a Pvt Ltd Company and we had Net Profit of 50 Lakhs for F.Y. 2010-11.  In this year we have paid Director Remuneration of Rs.36 lakhs, our finance consultant is saying that Company is allowed to pay  only 11% of the Profits as Director Remuneration, so we need to Recover balance amount from Directors.


Please let me know what is the exact rule in this regard. What if company has made a loss?

Thanks in advance

Replies (1)

Sec 198 specifically states that, a private limited company nas no specific limits to pay its director remuneration.

only public limited company has to pay not more 11% of net profits which are to be calculated as per SEC 349 and 350..

peace..!!!

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