Hello frnds,
I want to know whether the renumeration on the basis of Effective Capital is paid to directors only when the company doesnot have adequate profits or in case of losses in any year?? Can someone clear my doubt??
ANJALI NEGI (Chartered Accountant) (1263 Points)
17 October 2012Hello frnds,
I want to know whether the renumeration on the basis of Effective Capital is paid to directors only when the company doesnot have adequate profits or in case of losses in any year?? Can someone clear my doubt??
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 17 October 2012
In case the company execute an agreement or pass a resolution to pay the remuneration to its Whole Time Directors/ Managing Director which is exceeding the limits of section 198, 309 and 310. The profit shall be treated as inadequate under Schedule XII only for regarding the remuneration of Whole Time Directors of the company.