But according to sec 309 (9) , this sec doesnot apply to private company.

Originally posted by : P C Agrawal
	Dear Mr Sarvesh,   With reference to your observations, I am reproducing para from commentary on Section 309 by Ramaiya (17th Edition 2010 - Page 3841): "Under sub-section (4) a person who is not a wholtime or managing director cannot be paid any remuneration otherwise than by way of commission.  He can be paid a commission without the approval of the Central Government if the company authorises it by a special resolution and if the commission is within the ceilings laid down in the proviso to sub-section (4)." In any case, the question here is not whether a private company can pay monthly salary to a director or not.  The question is whether a director who receives monthly salary will become WTD or not and hence whether Form 32 needs to be filed for change of designation or not.   Thanks

Completely agree with Mr. P C Agarwal and have handled this situation before in my profile so I am quite clear, though would appreciate if experts could clarify if my stand is wrong. Certainly there is no restrcition on paying remuneration provided you get the CG approval and if the Director does not want to maintain Non Executive Director status then he may be remunerated without any approval but will be considered as WTD. And appreciate Mr. P C Agarwal for possessing good knowledge. Hope it helps!!

Dear Sneha, would be able to revert back after some time as my opinion was for pvt. co. subsy of public limited. Though except CG approval I hold on to what I suggested about WTD status still will be reverting back shortly.

Hi Deepika,

Did you come up with any solution to the above query. Is the Central Govt. approval required for a private company? Please do share your views. 

Thanks,

Prakriti sarvouy

Company Secretary

Dear Prakriti, I apologise for not replying to your query as I was little occupied with my work that I could not even logged in to see your update. Though I could not search anything over this query becuase of my busy schedule but I still hold on to my suggestion that any Director who is getting any kind of remuneration cannot be Non-executive Director and he will loose the status of being Non-executive. Still experts views are invited.

I have confirmed about it from Ankur Garg sir. He said for purely private company can give in accordance with its articles

Just went through the provisions again and pvt. co. can remunerate its non executive director as per its AOA. Hope it helps.

Originally posted by : Sneha
	Kindly reply. Can a private company pay salary of Rs. 70,000/- pm to its non - executive director ?? What are the compliances required for the same.

Just go ahead Sneha. Yes your private company may pay salary of Rs. 70,000/- pm to its non - executive director subject to the provisions of AOA. Simply record the same in board minutes and that’s it. There is nothing much to discuss as such.

Thanks

Ankur

Dear Ankur,

As you said that we can go by the provisions as per the AOA of the Company. Could you possibly suggest some situation like what exactly you mean by the provision in the AOA, because when i was working previously in a private company my secretarial consultant told me to change the designation of the director from Non-Exe to Executive since he was drawing good amount of salary from the company. 

Dear all, My query as under,

at the time of incorporation I have filed form - 32 by taking all directors as a Promoter with Non-executive.

Now I want to change the same from non-executive to Executive status. What is the procedure? whether I should attach Extract of meeting (if yes pls send format) and consent?

or simply file form 32 with effective date? is it necessary to change this status in case of service tax matter? if yes what is the circular in service tax relation?

When a number of large corporations went to the government for a bailout during the recession a few years ago, one of the first things the American people wanted curbed was executive compensation. A business that unsuccessful miserably and wanted TARP help shouldn't be lining already padded pockets. However, a brand new report has found executive compensation slightly dipped even while a number of firms, such as General Motors, AIG and Ally Financial, were receiving TARP funding. Source of article: Personal Finance

If private limited company wants to pay salary to its executive director. what is the procedure? 

only board resolution is enough or it needs to reappoint its director as KMP? 

AOA of the company is general one.