Get 3 Yrs of CCI Pro Membership at Greater Value. Subscribe Now!

Unlisted public company - managerial remuneration

822 views

Save Share

Join Us Follow Us Add as Source

Chandra Nahata

CA Job

29 Points Posted on 04 January 2013

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

Replies (1)

shristi

executive

67 Points Posted on 07 January 2013

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.