sitting fees

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Priyanka

Priyanka (Querist)
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04 October 2010 Is it necessary to pay sitting fees to all the directors of the Compnany.

Ajay Mishra

Ajay Mishra (Expert)
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04 October 2010 Dear Ms.Priyanka

Section 309 (2) of the Companies Act, 1956 provides that a director may receive remuneration by way of a fee for each meeting of the Board or a committee thereof attended by him. While sitting fee payable to the directors shall not be included in overall maximum limit of 11% of total remuneration payable by a public company to its directors.

Sitting fee may be paid only to a director who is not a managing director or whole time director i.e. sitting fee may be paid to a non-executive director only. {Department Letter No. 3/1/90CL_V, dated 18th August, 1990}.

The provisions of section are not applicable to private limited company, hence, a private company can pay sitting fee as per their requirements.

Regards
CS Ajay Mishra