remuneration committee

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 June 2010 Dear all,
What are the consequences of not forming the remuneration committee and increasing the directors remuneration

Rasesh

Rasesh (Expert)
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26 June 2010 Rem. Comm. is required in some specific cases only. If Rem Comm. is not formed, then when you file the form for appointment of the managerial personnel, the ROC will object stating that the rem comm. resolution is not attached. If you fail to provide teh same, the appointment will not be taken on record.

The appointment to such extent will be defective.

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Querist : Anonymous

Querist : Anonymous (Querist)

28 June 2010

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Querist : Anonymous

Querist : Anonymous (Querist)

28 June 2010 Dear sir thanks lot....i further elaborate the query please guide me....A public ltd. unlisted company has reappointed MD and has increased his remuneration which is not in accordance of shedule xiii, no special resolution was passed and no central government approval is obtained.The company has not started commercial operations yet. What consequencies company may have to face now and what remedies are available. pls guide

Ankur Garg

Ankur Garg (Expert)
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28 June 2010 Rem committee is required to be formed only when remuneration is in accordance with sch xiii in case of loss or inadequacy of profit.

In your case formation of committee is necessary coz there would be no profit and you have to follow the route of sch xiii to give remuneration to your director.

For illegal payment of remuneration section 309(5A) and (5B) would be applicable.

Regards