17 October 2012
Hello Experts, I want to know that renumeration paid to the Directors on the basis of effective capital is only in case the company doesnot have adequate profits or loss??? Is this paid to both executive and non executive directors?
17 October 2012
If co had suffered loss schedule XIII does not empower the co to pay remunaration to non - executive directors. The remunaration to non executive director may be paid with the approval of CG.
Schedule XIII applicable on managerial personnel which includes executive director.
The term "Managerial Person" under the Act means a managing director, whole-time director or manager. A company may either have a managing director or manager and in any of the case may also have whole-time director. Part I of Schedule XIII to the Companies Act, 1956 also states that the managerial person means a managing director or whole-time director or a manager.
The definition of Managerial person is not defined under the Act, but Schedule XIII includes MD/WTD/Manager . Non-executive directors are basically govern by sub section 4 of section 309 so, i think it will not be covered under this Schedule.
One more thing, proviso of sub section 4 of section 309 also distinguished to executive and non executive directors by making application to CG if you crossing the percentage limit.
So, I am sure that Non-executive director will not be govern by Schedule XIII.
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