Hello,
How the profit sharing will be / should be in the following scenario:
One Pvt. Ltd. company, 4 directors with fixed monthly remuneration. How the profit after tax will be / should be distributed among the directors?
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Profit sharing in pvt ltd
Replies (2)
Profit of the company are shown as 'reserve' in the balance sheet of the company. Unlike partnership firm, profit of the company can not be shared by the directors of the company.
Shareholders have the right over the profits of the company and the profit of the company can be distributed as 'dividend' in the proportion of their shareholding.
Directors have no right over the profit but if the company is doing well, they can be paid bonus (in some percentage of the salary) for which BOD consent is required.
agree with above answer
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