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logic between section 197 & schedule v limit

05 December 2017

when cg permission required ?

how a loss making company can give 30/60 lac remuneration , when a profit making company is limited 11% of profit only.

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2 Replies

murthy (Asst manager) (86 Points)
Replied 25 May 2018

For profit making co any one can done better bcoz of eg :-its brand value,demand For loss making co, no one dare to take position & lots of experience required to make loss making co to profit making co Now no CG Permission required- pls check All the best

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Santhosh Ganesh (AGM - Secretarial ) (136 Points)
Replied 26 May 2018

Schedule V is invoked only when the company wants / desire to pay more than the limits permitted in the law i.e., 11% of NP i.e., Schedule V is not the sole property of loss making Company, even a profit making companies can take shelter also.

However the Act has considered certain aspects and given a specific provision / limits which enables even a loss making company to pay some considerable amount as remuneration so that it can attract and retain good talents who has the capacity to convert a loss making company into a profit making one.