Save Rs 499. Go Ad-Free with CAclubindia Pro for 2 Full Years. Subscribe Now!

Managerial remuneration in excess of companies act, 2013

Companies Act 2013 413 views 2 replies

sudharshan reddy

42 Points Posted on 13 December 2017

Hello,

Hope everyone doing well and have a nice day!

In Xltd., ( "the Company") has paid in excess of Schedule V (since the comaony has losses) speciifed limits without taking any apporval from shareholders and or central government permission (if applicable).

Now the question is:

Q1. Can the company pay in excess of Companies Act, 2013 ?

Q2. if yes, Since the company has not obtained shareholders approval , can they ratufy the same in the upcoming AGM / SGM?

Note: AOA doesn't speak anything

Please quote the relevant sections of Comapnies Act, 2013 while answering those questions.

Replies (2)

Sudhir Todkar

CS Professional

1021 Points Posted on 16 December 2017

1) Yes after getting approval of Shareholders in GM.

2) No, Directors/Managers should refund the excess amount drawn from company as remuneration & until such sum is refunded, they holds it in trust for the company..

Company shall not waive the recovery of any sum refundable to it, unless permitted by the central government..

For your reference please read section 197(9) & (10)..