Managerial remuneration sec197

Section 197 of the Companies Act 2013, amended by Companies (Amendment) Act, 2017, is applicable on all the public companies and governs the provisions relating to managerial remuneration.

Case 1) Company would require approval in a general meeting by a special resolution if it wishes to propose remuneration in excess of 5% of the net profit for the manager (Assuming there is only one manager/ MD/ WTD)

Case 2) Company would require approval in a general meeting by a special resolution if it wishes to propose remuneration in excess of 10% of the net profit for more than one whole time directors.

Also it needs to be kept in mind that if the total managerial remuneration paid by the company exceed 11%, then earlier requirement of getting Government's approval has been done away with and now only an approval of general meeting is sufficient compliance of the Act.

Yes exactly.

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