Dear Professional Friends,
Is schedule V of the Companies Act, 2013 applicable to private limited companies with regard to appointment of MD, WD and manager and payment of remuneration to them?
sagar batra
(xxx)
(56 Points)
Replied 21 July 2015
hey mate,
pursuant to sch V, literal interpretation does not exclude private companies from the compliance whereas section 197(1) and(2) conclusively points for public companies only while 197 (3) specifies " a company " which means it includes both public company and private company
sch V compliance requires CG approval; companies other than listed companies and subsi of listed , have been given relaxation under RULE 7 which exempt such companies from CG approval for providing remuneration as required under sch V but nothing is specified for appointment
harmonious interpretation concludes, that a private company which is not a subsi of listed company can pay remuneration in case of inadequate profits without obtaining CG approval but as far as appointment of manager MD WTD is concerned , sch V shall be applicable.
That means appointment of MD to a private company calls for section 164 ,196, sch V.
Thanks
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
CAclubindia
