Does Schedule V of the Companies Act, 2013 applicable to private companies.
Vishal
(Article Asst.)
(95 Points)
Replied 05 July 2014
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 05 July 2014
Part-I relating to Appointments is applicable to all companies including private companies.
Part-II relating to remuneration is applicable only to public companies.
Sec.197(1) puts restrictions on remuneration payable only by a public company. However Sec.197(3) provides that in case of no profits or inadequate profit "a company" can pay remuneration as per Sch.V. Here "public company" has not been used which has created doubt about its applicability to private companies also. However, looking to intention of the law as mentioned in Sec.197(1), it can be said that Sch.V is not appicable to private companies. MCA should issue clarification on this.
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