Remuneration to director of pvt ltd company

This query is : Resolved

Venkat Iyer (Querist)
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21 April 2012 1. Can remuneration paid to a Director of a Pvt Ltd Company.
2. I have heard that remuneration can be paid to only Managing Director or Executive Directors. Whereas only with the designation of Director can not avail Remuneration? He can be paid Sitting fees.
3. Only 11% of the profit of the Company for a financial year can be distributed among the Directors of the Company? Is it correct?
4. What are the rules in case of Income tax as well as in ROC.

CA CKP

CA CKP (Expert)
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21 April 2012 1. A Pvt Ltd Company can paid remuneration to its Directors.
2. As per sec 309(4) Public Ltd co. can paid remuneration to its Dir. who is not in whole time employment nor managing Dir
either
by way of monthly, qualrly, annual payment with the approval of CG
or
by way of commission if the co by resolution authorised.
3. Total remuneration should not exceed 11% of the profit.
But the above provision does not apply to the Pvt Ltd Companies. So pvt ltd co. can paid the remuneration to its director who is not in managing dir nor in whole time employment provided the AOA authorised the same without any restriction on maximum limit of remuneration.