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Directors Remuneration

1529 views 3 replies

Vijayamahantesh V. Khannur

Company Secretary

91 Points Posted on 16 August 2010

Dear all,

Section 309 of companies act does not state whether approval of members is required for paying monthly remuneration to non executive directors. it only states about central govt approval. In this context, opinions are differing whether we should take prior approval of shareholders also?

Further, whether pending central govt approval, can company make monthly remnuration to non executive directors?

Please share your views

Regards

Vijayamahantesh

mkhannur @ rediffmail.com

Replies (3)

Jagruti (CS)

Service

1953 Points Posted on 16 August 2010

Section 309 states that if Monthly payment is made to Non executive director (NED) than prior approval of CG is must.

But if only commission is paid than Special resolution should be passed before making the payment of commission to NED

The both payment should be within the limit.

If Company wants to pay monthly remuneration or Commission more than the limit set out in Sec 309(4) provisio, than by prior approval of CG & Members bith is a must.