Remuneration from 2 companies

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 November 2012 Dear expert
can a person can draw remuneration from more than 2 companies as directors remuneration one as MD and in other as director / whole time director

Amol S Joglekar

Amol S Joglekar (Expert)
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24 November 2012 Yes. Quite possible.

Ankit Bagaria

Ankit Bagaria (Expert)
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24 November 2012 yes.. its possible....

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Ajay Mishra

Ajay Mishra (Expert)
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24 November 2012 Hi

As per Section III of Schedule XIII:

Remuneration payable to a managerial person in two companies subject to the provisions of Sections I and II, a managerial person shall be eligible to draw remuneration from one or both companies subject to that the total remuneration drawn from the companies does not exceed the higher maximum limit admissible from any one of the companies of which he is a managerial person.

Ajay Mishra

Ajay Mishra (Expert)
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24 November 2012 Maximum remuneration payable to managerial person in case he is a managerial personnel in two companies:

Section III of Part II of Schedule XIII to the Companies Act, 1956 inter alia provides that the total remuneration which can be paid by two companies in which an individual is a managerial person shall not exceed the higher maximum limit admissible from any one of the companies of which he is a managerial person. It is to be noted that Section III is also subject to the provisions of Sections I and II.
As per Press Note No. 2/96, dated 16-9-1996 issued by the Department of Company Affairs vide F. No. 1/18/96-CL V inter alia provides that a person who is a managerial person in more than one company shall be able to draw remuneration from one or both the companies.

For making payment to a managerial person from two companies, the following steps are to be taken:—
(i) ascertain that which of the following two sections is applicable to both the companies of which one common individual is a managerial person;
Section I — Remuneration payable by companies having profits.
Section II — Remuneration payable by companies having no profits or inadequate profits.
(ii) working out of maximum remuneration which can be paid to the managerial person by each company separately, the higher of above two maximum limits will be the ceiling on total maximum remuneration which can be paid to such managerial person by both companies taken together.