Re : U/s 269 & Sch-XIII

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Hi friends , i have a query dat the company appointed MD where its a losses making company without obtaining central goverment approval, can an application for approval of central government be made now for retrospective effect or any condonation application is to be move along with dat.

 

please revert ur valuable advise.

Replies (2)

Even in case of loss making companies if the remuneration is within the limits specified in Schedule XIII there is no need for CG approval.

However if the remuneration exceeds the limits specified in Schedule XIII one needs to obtain CG approval. Since there is delay, your application for approval of managerial remuneration in Form 25A should be accompanied with application for condonation of delay.

Section 269 read with Sch XIII is applicable to a Public Limited Company as well as a Private Limited Company which is a subsidiary of a Public Limited Company and not to a Private Limited Company. In case the proposed amount of remuneration is within the slab of Schedule XIII (provided the company has complied with all the conditions of Sch XIII) then NO Central Government Approval is required even in case of loss making company or the company having inadequate profits.

Delayed application alongwith application for condonation of delay may be filed provided the delay should not be unreasonable. In other words, if your Company's balance sheet has already been audited and filed with the MCA then delayed filing may not be acceptable. In such a case you will have to file application under Section 309(5B) for waiver of excess payment of remuneration  to the Managerial Personnel.

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