19 June 2012
in a public company, there is 1 MD, 1 WTD and 3 Non-executive directors. In the FY 2011-12 the company had a net profit of RS. 27 lacs. In the same year the company paid to its directors Rs. 13 lacs as remuneration. How can this violation be regulated?
19 June 2012
Dear Friend according to provisions of sections 198, 269, 309 of the companies act, 1956 a company having more than one Managing Director/ Manager/ Whole Time director can not pay more that 10% of the profit as calculated according to the provisions of Section 350 of the act. Now in your case the excess payment made to the directors will be returnable or a special resolution will be passed at the meeting of members to increase remuneration to directors.
CAclubindia
