I have one query, one of my friend has started a company. He is a director in the company but he is also doing job somewhere. They want to start a coaching centre where he along with other director will provide coaching. Can company pay professional fees to them. If yes, do we need to treat it as Managrial Remuneration. They do not want to pay salary to any of the director thanks in advance
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Professional fees to director
Replies (2)
Achint,
I understand that your company is a Pvt. Company. In my opinion, payment of Professional fees to the Directors will attract provisions of sec 314(1) of the Companies Act, 1956. You will require to pass a special resolution for appointment of Director to the "Office or place of profit" and for payment of professional fees.
if your articles provides, salary can also be paid to a non-executive directors because sec. 198, 269, 309 are not applicable to private limited. A Board resolution for payment of salary will be enough.
Regards
Malav Shah
Hi Achint,
Please check my reply to ur query in the Expert section.
However as per my answer in the expert section of CAClub section 314 is not applicable in your case.
Regards
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