Remuneration to director

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CA Ashwani Agarwal (Querist)
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19 November 2012 How much remuneration can be paid by a PVT LTD company to its directors?

Is there any ceiling limit?
Is there any procedure to be followed?

There are say 10 directors in a PVT LTD. Can we pay salary to all of them? They are all executive directors.

Also please tell relavant Sections.

Ajay Mishra

Ajay Mishra (Expert)
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19 November 2012 Hi

The provisions of Companies Act, 1956 will not apply to remunerations paid to directors of private limited company.

The remunerations of such company is govern by its articles.

If articles is not restricted,you are free to give remuneration of your directors.

CA Ashwani Agarwal

CA Ashwani Agarwal (Querist)
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21 November 2012 Thanks.
Now the specific question is that we are giving 5 directos Rs. 100000 P.M.
Now at the end of the year, can we give them a lump sum of say 300000 each as remuneration.
Will this be violition of any law?

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Ajay Mishra

Ajay Mishra (Expert)
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21 November 2012 Hi

You will be free to pay. Please check your company articles have any restriction on this.