07 August 2010
can 1 person be a managing director of two companies?what are the provision releated to it?if yes ...then how we decide the remuneration of the director acting as a md of two companies?
07 August 2010
Sec 316 - Number of companies of which one person maybe appointed managing director.
(1) No public company and no private company which is a subsidiary of a public company shall, after the commencement of this Act, appoint or employ any person as managing director, if he is either the managing director or the manager of any other company (including a private company which is not a subsidiary of a public company), except as provided in sub-section (2).
(2) A public company or a private company which is a subsidiary of a public company may appoint or employ a person as its managing director, if he is the managing director or manager of one, and of not more than one, other company (including a private company which is not a subsidiary of a public company:
Provided that such appointment or employment is made or approved by a resolution passed at a meeting of the Board with the consent of all the directors present at the meeting and of which meeting, and of the resolution to be moved thereat, specific notice has been given to all the directors then in India.
(3) Where, at the commencement of this Act, any person is holding the office either of managing director or of manager in more than two companies of which each one or at least one is a public company or a private company which is a subsidiary of a public company, he shall, within one year from the commencement of the Companies (Amendment) Act, 1960 (65 of 1960), choose not more than two of those companies as companies in which he wishes to continue to hold the office of managing director or manager, as the case may be; and the provisions of clauses (b) and (c) of sub-section (1) and of sub-sections (2) and (3) of section 276 shall apply mutatis mutandis in relation to this case, as those provisions apply in relation to the case of a director.
(4) Notwithstanding anything contained in sub-sections (1) to (3), the Central Government may, by order, permit any person to be appointed as a managing director of more than two companies if the Central Government is satisfied that it is necessary that the companies should, for their proper working function as a single unit and have a common managing director.
07 August 2010
if a person is appointed as managing director in two different Companies and intend to draw remuneration in both the Companies, How his remuneration ( with limits as per schedule XIII)would be decided in both the Companies
07 August 2010
Total ceiling of managerial remuneration
Section 198(1) relates to overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits. The total managerial remuneration payable by a public company or a private company which is a subsidiary of a public company, to its directors and its manager in respect of any financial year shall not exceed 11% of the net profits of the company for that financial year. Such net profits shall be computed in a manner laid down under sections 349 and 350, except that the remuneration of the directors shall not be deducted from the gross profits.
Remuneration is payable to all the directors including managing and whole-time directors and in any capacity. Therefore, it includes the remuneration for services rendered by him in any other capacity other than that of a director.
But this provision is not applicable to a Pvt Ltd Company which is not a subsidiary of a Public Limited company.
07 August 2010
if a person is appointed as managing director in two different Companies and intend to draw remuneration in both the Companies, How his remuneration ( with limits as per schedule XIII)would be decided in both the Companies
07 August 2010
The remuneration will be decided by company applying sec. 198 separately. subject to this there is no other restriction. If yours is a pvt ltd company then no restriction at all. Both company will decide separately. It does not matter to a company what the other company, in which he is a managing director, pays him.
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