Can a private ltd pay remuneration to non-executive diretcor? Which section of the act is applicable ? Will this considered as RPT under Section 188 ?
CS Arjun Rajagopal
(B.com, ACS)
(1056 Points)
Replied 14 March 2016
Yes, There is no restriction in paying remuneration to non executive director in a private company. This is not covered by Sec 188 becuase it is not a related party transaction. Kindly note that private companies are exempted from complying Sec 197(Overall Maximum Managerial Remuneration)
Regards,
Arjun Rajagopal
CAclubindia
