Amendment to Schedule V of the Companies Act., 2013

Last updated: 22 March 2021

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The Ministry of Corporate Affairs has amended Schedule V of the Companies Act, 2013, effective from 18th March 2021. These changes specifically update the 'REMUNERATION' section, Part II. The amendments clarify and expand the scope to include 'other director or directors' alongside 'managerial person or persons'. A new table (Table A) has been introduced, detailing the limits for yearly remuneration payable to both managerial persons and other directors based on the company's effective capital.

MINISTRY OF CORPORATE AFFAIRS Dated: 18th March, 2021 S.O. 1256(E).- In exercise of the powers conferred by sub-sections (1) and (2) of section 467 of theCompanies Act, 2013(18 of 2013), the Central Government hereby makes the following amendments to Schedule V of the said Act, namely: 2. I

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FAQ :

The amendment aims to update the remuneration limits and guidelines for both managerial persons and other directors, as specified in Schedule V of the Companies Act, 2013.

For the purposes of Sections I, II, and III of Schedule V, an 'other director' is defined as a non-executive director or an independent director.

The amended Schedule V introduces Table (A) which outlines the limits for yearly remuneration payable to managerial persons and other directors, based on the company's effective capital, ranging from negative or less than 5 crores up to 250 crores and above.

These amendments were made on 18th March 2021.

Yes, for companies with effective capital of 250 crores and above, the yearly remuneration limit for both managerial persons and other directors includes 24 Lakhs plus 0.01% of the effective capital in excess of Rs.250 crores.