Director's Remuneration

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shoeb parwaiz (Querist)
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27 April 2011 Dear All,

I wanna know that Director's remuneration shouldn't be more than 11% of the Net Profit even in Private Company. Can it be possible that Director can be appointed without paying any remuneration.IF we allow Travelling Expenses,Petrol Expenses & other expenses to a director/s should be consider as remuneration.

Jayashree S Iyer

Jayashree S Iyer (Expert)
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27 April 2011 The limits on managerial remuneration is applicable to public companies and subsidiaries of public companies. It's not applicable to private companies. So private companies can pay more than 11% of its net profit as remuneration.

Directors can be appointed without paying any remuneration.

Travelling expenses, Petrol Expenses, telephone expenses, etc. reimbursed on actual basis will not be considered remuneration.

However if a fixed amount is paid towards convenyance allowance, telephone allowance, medical allowance etc. on a monthly basis it will form part of remuneration.