31 October 2009
There is no restrction under companies act for a private limited company for payment of salaries in terms of amount and number of directors. However the same should be reasonable and their services are required for the company otherwise the assessing office will disallow the expenditure.
31 October 2009
Managerial remuneration is case of public company is governed by section 198 and 309 along with schedule XIII.
Approval of the Central Government for payment of remuneration shall be necessary only if remuneration exceeds 5% of the net profits for one such director, and if there is more than one such director, 10% for all of them put together. This aforesaid limit is applicable in the case of a company having profits. (Section 309)
31 October 2009
Requirement of approval of the Central Government for payment of remuneration to managerial person A company which has no profits or has inadequate profits shall not pay to its directors, including any managing or whole-time director or manager, by way of remuneration any sum exclusive of any fees payable to directors under section 309(2), except with the previous approval of the Central Government. [Section 198(4)]
However, approval of the Central Government shall not be required for payment of remuneration to its managerial person if the appointment has been made in accordance with the provisions of section 269 read with Schedule XIII to the Act. [Section 198(4)]
31 October 2009
YES your Company can pay remuneration to its more than 3 Directors & to all Executive Directors. But overall remuneration should not exceed 11% of net profit as required by section 198.
Please download my handout on Remuneration of Managerial Personnel for better understanding.
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