Hi,
Can somebody please confirm me whether Managerial Remuneration clause under Companies Act is applicable to Private Limited Company.
If yes, then what are the procedures to be followed for paying Remuneration of Rs. 2 lac per month to a director ?
How do I audit Managerial Remuneration as an auditor? I need to do this for disclosure in Notes to Accounts.
Managerial remuneration clause of the companies act is not applicable to private companies unless Articles specifically mentions about it.
I agree with what Jignesh has said. However, you could ask the management/accountant for a written documentation of what a manager is supposed to recieve in monetary terms for his services. Everything should be properly specified with respect to rates. It's almost like auditing the salary with the appointment letters. Don't worry dude. ;)
In case of private limited company, whcuh is during the year come under section 4 (7), so company has to comply with some specific section including manegerial remunerration section also. So please can you clarify whether while calculating the limit of 10% or 11% whether we have to take one year profit of profit for the period comes under 4 (7), further remuneration will be taken for 1 year or proportionately that is during the period the company come under section 4(7).
Hi Pawan,
Your querry is not so much clear. Do you want to say that your company which is private in nature has come under the purview of Sec 4(7) of the act and so the managerial remuneration has to be calculated, for the current year, in accordance with the provision of the Act?
Pl clarify.
Deepika Singh
CAclubindia
