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Director salary change in Private Limited

Mohanapriya Navaneeth (Accountant) (42 Points)

19 August 2010

Hi,

Please help me

What are the procedure for the change of salary of the director during the financial year in the private limited?

Any forms must be submitted to ROC? and what are the procedures?

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13 Replies

Ankur Garg (Company Secretary and Compliance Officer) (114778 Points)
Replied 19 August 2010

Hi,

Strict provisions relating to remuneration are not applicable to a private company. To increase the remuneration simply pass a board resolution.

No need to file any form with ROC. But properly record the same in board meeting minutes.

Also check the provisions of your article regarding remuneration before taking any step.

Regards

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HARDIK (COMPANY SECRETARY NCFM (Corporate Governance )) (664 Points)
Replied 19 August 2010

Agree with ankur. Section 198 and other managerial remuneration related sections dont apply to pvt companies.

Mohanapriya Navaneeth (Accountant) (42 Points)
Replied 28 August 2010

Thanks for your greatful help.

Kindly send me the board resolution format in case of director salary decrease.

Vasant Patel (Proprietor) (47 Points)
Replied 04 May 2012

Can you send me copy of Board Resolution for increase in remuneration of MD in pvt. Ltd. Company

I thing any resolution for variation in terms of Managing Director require to file with ROC as per section 192 is it ?

Akansha Rathi (Practising Company Secretary ) (27 Points)
Replied 04 May 2012

Dear Vasant,

Correct, you have to file Form 23 with the ROC for any change in terms of appointment or appointment of new MD.

Regards,

Akansha Rathi

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Regit (CA.Final) (320 Points)
Replied 05 May 2012

Mr.Vasant The terms you said will not apply to a Pvt Limited company.

HOwever, the rate of managerial remuneration should be in accordance with, either as specified in the articles or as that passed in a Board resolution or an AGM with ordinary resolution.

No need of any forms to be submitted to the ROC.

Mahadevan (Tax) (23 Points)
Replied 09 August 2012

Would be nice if someone could share a draft resolution for such increase in remuneration of a director of private company. Thanks in advance.

(Guest)

“RESOLVED THAT pursuant of the provisions of the Companies Act, 1956 (“the Act”), approval of the board of directors of the company be and is hereby accorded for the payment of salary to Mr. ABC from October 01, 2009 in such manner as the Board may determine from time to time and upto the extent of Rs. 200,000/- (Rs. Two Lacs only) per month.”

“RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board be and is hereby authorised to take all actions and do all such deeds, matters and things, as it may in its absolute discretion deem necessary, proper or desirable and to settle any question, difficulty or doubt that may arise in this regard.”

2 Like

(Guest)

Another specimen -

DIRECTOR’S REMUNERATION

"RESOLVED THAT all the Directors (or any of the director/s) be paid a remuneration of Rs.________ per month each as compensation to the time and efforts spent by the directors for the business of the Company with effect from ________ until otherwise decided by the Board.