Saturday, November 17, 2012

Director’s Remuneration

Director’s Remuneration
Remuneration to be computed in reference to a financial year
Section 198 and 309 of the Act contain provisions about managerial services or remuneration and specify certain limits which are expressed in percentage terms .it is relatable to ‘financial year since the limits specified in section 198 or 309 are in relation to or for a financial year.

Maximum Remuneration to Directors
Total managerial remuneration payable by a public company or a private company which is a subsidiary of a public company, to its directors and its manager in respect of any financial year shall not exceed eleven per cent of the net profits of that company for that financial year

Section 309(1) of the act provides that the remuneration payable to directors including any managing or whole time director shall be determined in accordance with and subject to the provisions of section 198 and this section i.e. section 309 either by Articles of company, or by resolution ,or if the articles so require by a special resolution passed by the company in the general meeting and the remuneration payable to such director as aforesaid shall be inclusive of the remuneration payable to such director for services rendered by him in any other capacity.
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