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Executive director

663 views 3 replies

Dear Members,

 

Please suggest on the following query:

 

Mr. A is an WTD of a public limited Company. Later he was appointed as an Executive Director (designated as "Director") in a Private Company and also drawing remuneration in that capacity. Is violation of any provision of the Companies Act, 1956 involved therein? Please provide your valuable views in this regard.

 

Thanks

Replies (3)

No, there is no violation under Companies Act., 1956.

 

A whole time director of a company can hold a office of executive director in other company. (Kindly note that he cant hold a office of Whole time director in other company).

 

In case he is getting remuneration from both the companies, the amount of remuneration from both the companies should not exceed the higher maximum limit of remuneration from any of the two Companies.

There is no violation of any provision of the act.

Thanks Sneha!!!! But as far as my observation is concerned the limit on remuneration from both the companies becomes applicable only if such director is a managerial person in both the companies. I think in this case he will not be considered as a managerial person of a pvt ltd. co. So the limit will not apply.


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