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MD without any salary paid?

disha (Company Secretary) (28 Points)

09 July 2010

An individual is appointed as MD in two Public Ltd. Companies. And we intend to give him the salary from only one Company and not both. Is it possible to keep him appointed as a MD in one of the Co. without any salary and with salary in the other Co.?

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8 Replies

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 09 July 2010

Yes Disha the same is very much possible...In fact if he continue in both the companies without salary there is no issues at all.

So according to me it is possible to keep him appointed as a MD in one of the Co. with salary and in other company without salary.

Regards

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Nitin Grover (CS) (1228 Points)
Replied 09 July 2010

Dear Disha

Yes its possible and if MD of your company is also a MD in another Company then also his/her Salary should not increase as per limit of Schd. XIII of the Act.

Regards

DR GAURAV GUPTA FCA, FCS, LL.B (COMPANY SECRETARY) (1046 Points)
Replied 09 July 2010

both are right because a person can act md in two companies and salary from both the company should not exceed the limit prescribed u/s 198 and 309 and if he doesnot take salary from one co. or both co. it is not the issue

disha (Company Secretary) (28 Points)
Replied 10 July 2010

Thank you all for the reply. It was of great help. Also, if anyone has resolutions for the same it would be really appreciated.asin the Board of directors granting permission for non-continuance of remuneration in the company as the agreement was already made earlier for salary in one of the Company.

Nitin Grover (CS) (1228 Points)
Replied 10 July 2010

Dear Friend

just show in resolution only that terms and conditions as per agreement made between company and MD.

that's it

Regards

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disha (Company Secretary) (28 Points)
Replied 10 July 2010

nitin-The MD was re-appointed and being under a SEBI violation the appointment is still under approval with the CG. So, my agreement with the MD is still pending technically with the Co.

I need to frame a resolution where i can take into account the MD'S wish to discontinue his remuneration pending the approval.

Nitin Grover (CS) (1228 Points)
Replied 10 July 2010

Dear Disha

in My views if remuneration as per schd. XIII no need of approval from C.G

and if any violation pls tell me.

I will draft resolution.

Regards

disha (Company Secretary) (28 Points)
Replied 10 July 2010

THe scenario is this-The CG approval i have already applied for in the first Co, where he is already a MD, as there was a SEBI violation. The reply from CG is pending. Now, In the mean time he is appointed as MD in another Co. and wishes to dis-continue his salary friom the first Co. So i need the resolution in the first Co. for the same.