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Inadequate profit
How the decision can be taken that this profit is adequate or inadequate in the context of remuneration payable to the Managerial remuneration
Replies (4)
go through schedule 5 of companies Act 2013
1) Work out actual amount of remuneration proposed to be paid to directors in current financial year.
2) Work out estimated net profit u/s 198 of current financial year
3) Take total of (1) and (2) above
4) Work out maximum remuneration that can be paid to directors u/s 197 ( @ 5%/10%/11% as the case may be of (3) above)
5) If amount as per (1) above is not more than (4) above, profit is adequate. Otherwise profit is inadequate.
Thanks to both of you
schedule 5 read where company has no profit than company pay remuneration to director and remuneration as per paid up capital given there.
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