Unlisted public limited company wish to pay remuneration to it's whole time director exceeding 5% of the profit.
What is the procedure of payment of remuneration exceeding 5% of profit to Whole time director of Unlisted public company.
Is approval of Central Government is required?
There is no default of payment to creditor or depositor.
Thanks in advance..
Best Regards
Chandra
Section 309 says that any public Company or any pvt Company which is subsidiary of public Company shall not pay more than 5% of net profits of the Company as remuneration to any single whole time or managing director without the approval of Central Government. Hence you will have to take CG approval.
The only exception is that if the director is receiving any amount for rendering service to the Company in any other capacity if such service is of professional nature and in the opinion of CG, the Director posses requisite qualification for the practice of the profession.
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