Become a Govt. Certified GST Practitioner. Batch begins 18th Nov. Register Now!

remuneration vto non executive director

Sejal Shah (1 Points)

23 August 2018

can company give remuneration to non executive director?

Reply
Follow
Share

2 Replies

Jatin Bajaj (CS) (2930 Points)
Replied 25 August 2018

Yes as per the provisions of Section 197 of the Companies Act 2013, the Company can pay remuneration to non - executive Director of the Company which shall not exceed 3% of the net profit of the Company if the Company is not having any managing aor whole time director and 1 % in any other case.

Provided if the services rendered by the non executive director are of professional in nature then the limits of remuneration definded under section 197 shall not apply.

Further sitting fees payable to nonnexecutive director shall not exceed from sitting fees payable to other director

Upgrade to CAclubindia Pro. Subscribe Now!

Pankaj (22 Points)
Replied 25 August 2018

Under the Companies Act, 2013, Section 197 allows a company to pay remuneration to its Non- Executive Director(s) either by way of a monthly payment or at a specified percentage of the net profits of the company. TheCompany is however not obligated to remunerate its Non- Executive Director(s).