Can anyone please define the term inadequate profits as per Schedule XIII of the Companies Act, 1956?
4 Replies
cs ashwini kumar
(Company Secretary in Practice)
(173 Points)
Replied 16 February 2011
Dear Ms Nisha,
The term "inadequate profit" has not been defined in the Companies Act, 1956 for the purpose of managerial remuneration, however in my opinion and as per my interpretation, the profits of any company (Public Co. and Subsidiary of a Public Co.) may be termed as inadequate in case the proposed remuneration to the managerial personnel exceeds the limit of 5%/10%/11% (as the case may be with regard to Section 309 of Cos Act) of the profits as per Section 198.
CS Ashwini Kumar
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 17 February 2011
In adequate Profits:- When a company contracts its WTD(s)for the remuneration which is exceeding the specified percentage of its Net Profit the profit is termed as inadequate profits to serve that contract (only for that purpose). And schedule XIII would be applicable.
CA Sumat Singhal
(Credit Analyst/ Financial Services/ Accounts & Finance)
(3677 Points)
Replied 17 February 2011
| Originally posted by : CS Ankur Srivastava | ||
 |
In adequate Profits:- When a company contracts its WTD(s)for the remuneration which is exceeding the specified percentage of its Net Profit the profit is termed as inadequate profits to serve that contract (only for that purpose). And schedule XIII would be applicable. |
 |
hello sir inmy point of view 'adequate profits' does not mean as above because if company enters into such contract then schedule XIII is not complied with hence approval of central government is required.
so i think sir ashini kumar is correct.
regards,
sumat singhal
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 18 February 2011
| Originally posted by : Sumat Singhal | ||
|
|
Originally posted by : CS Ankur Srivastava In adequate Profits:- When a company contracts its WTD(s)for the remuneration which is exceeding the specified percentage of its Net Profit the profit is termed as inadequate profits to serve that contract (only for that purpose). And schedule XIII would be applicable. hello sir inmy point of view 'adequate profits' does not mean as above because if company enters into such contract then schedule XIII is not complied with hence approval of central government is required. so i think sir ashini kumar is correct. regards, sumat singhal |
|
Please go through Schecule XIII. In the above case schedule XIII would apply.
Recent Topics
- NRO Interest - Taxed at source and in Foreign Coun
- Clarity needed on effective date
- Income Tax Refund Deadline Shortened to Five Years
- Rectification Applications for Past GST Demands
- Where can I find a trusted provider to hire a skip
- GST Invoices Series
- FILING OF ITR AY 20-21
- CLAIMING OF U CLAIMED RCM
- Building construction works
- REGARDING GSTR-9 F.Y 2023-24
Related Threads
CAclubindia
