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Max Remuneration to Directors

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Sanjay

Director

92 Points Posted on 17 January 2020

Is there a limit on the amount of salary (Remuneration) which can be paid to the director / directors in a Pvt Ltd company?

Its a family-owned PLC, not sure if that matters.

For example, if the PLC's profit (without director's salary) is 100.00. Can the director's salary be 100.00? This would mean Zero profit for the company.

Thanks

Replies (3)

Quick Summary

This discussion clarifies the remuneration limits for directors in private limited companies. Unlike public companies, private limited companies are not subject to Section 197, meaning there's no statutory cap on director salaries. Remuneration can be set via board resolution, typically as a fixed amount plus any agreed perks, rather than being directly tied to company profits or turnover.

Jatin Bajaj

1920 Points Posted on 18 January 2020

As Section 197 which deals with the remuneration of managing director or whole time director is not applicable on private limited company, so provisions of section 197 shall not apply. Remuneration to Director in private limited Company can be decided by passing the Board resolution in board meeting by deciding the fix remuneration plus perks if any.

Sanjay

Director

92 Points Posted on 18 January 2020

In that case, if the PLC's profit (without director's salary) is 100.00. Can the director's salary be 100.00? This would mean Zero profit for the company?

CS Vishal Mehta

Self Employed

362 Points Posted on 24 January 2020

There needs to be some fixed remuneration to be decided in Board Meeting and/or through letter of offer, remuneration can not be variable like profit or turnover of Company