Remuneration to non executive director

Hi,

U/s 197, Pvt. Ltd. can pay remuneration to NED maximum of 1% of Net profits if  company already employs whole time director or managing director

Otherwise 3% of net profit, So the basis of payment to Non Executive Director is net profit of the company for the FY.

THANKS.

BUT ANOTHER QUERY IS THAT THARE IS ANY EXE,PTION TO PRIVATE COMAPNY REGARDING APPLICABILITY OF SEC. 197?

THANKS.

BUT ANOTHER QUERY IS THAT THARE IS ANY EXE,PTION TO PRIVATE COMAPNY REGARDING APPLICABILITY OF SEC. 197?

There is no strict provision for the payment of remuneration to NED in case of Pvt. Ltd. Company and above suggested remuneration is only for Public company

Yes, According to section 197(1), second proviso, Remuneration payable to Directors who are neither managing Director nor whole time director shall not exceed 1% of the net profit of the Company if the Company is having managing or whole time Director, but 3% in any other Case, i.e. if Company does not have managing or whole Time Director.

A Director may receive remuneration by the way of fee for attending Board meeting or Committee meeting or for any other purpose as decided by the Board which shall not exceed 1 lakh rupee per meeting of the Board or committee thereof.

And sitting fee payable to Independent Director shall not be less than any other Director.