02 January 2010
Warm regards to everyone, As per co.s act a pvt. ltd. co. is exempt from the managerial remuneration provisions that are applicable to public ltd. co.s. Can anyone tell me what is the procedure of fixing remuneration of M.D or the other directors in a pvt. ltd. co.
04 January 2010
No specific procedure is required in a private company. Simply check your AOA for any provisions regarding managerial remuneration. In the absence of any contrary provision in the AOA you may fix the remuneration in the board meeting by passing a board resolution.
You have already mentioned that the Pvt Ltd co is exempted from such ceiling of remuneration.
As such there is no matter of concern as far as the corporate law is concerned.
But, the matter to be kept in mind is that the Remuneration should be justifiable to the Income Tax Authorities taking into consideration the nature & size of the business.
As far as the taxing is concerned. There is no such tax evasion is possible as both the Directors & Company is taxed to the extend at the same rate.
I hope your quary has been resolved.
If any diff. be free to contact
With Warm Regards M. Vanesh Kumar CA Students - Expert Association
CAclubindia
