Dear all.,
Tell me whether Sitting Fee is considerable as part of Managerial Remuneration while computing limitation on Remuneration...???
Although, I know that there is separate limitation on payment of Sitting Fee..., that means it shall not be treated as part of Managerial Remuneration...
However I am not sure., so please reply....
Section 309 (2) of the Companies Act, 1956 provides that a director may receive remuneration by way of a fee for each meeting of the Board or a committee thereof attended by him. While sitting fee payable to the directors shall not be included in overall maximum limit of 11% of total remuneration payable by a public company to its directors.
Sitting fee may be paid only to a director who is not a managing director or whole time director i.e. sitting fee may be paid to a non-executive director only. {Department Letter No. 3/1/90CL_V, dated 18th August, 1990}.
The provisions of section are not applicable to private limited company, hence, a private company can pay sitting fee as per their requirements.
Regards
CS Ajay Mishra
I agree with Mr Ajay Mishra i.e a co. shall not pay sitting fees to its MD & WTD for attending BM or Committe meeting becoz it is part of overall duty of MD/WTD to attend & hold BM therefore if sitting fees paid to MD/WTD then it will be counted in 5%,10%.11% of NP i.e MCA Clarification overrules sec 198(2),But if Sitting fees paid to PTD ,then it will not counted in1%,3% and in 11% of NP
Sitting fee is not considered as a part of managerial remuneration.It will not be counted for the overall limit of 11% .
not considered as mangerial remmuneration
CAclubindia
