DIRECTOR REMUNERATION LIMIT

[shanker bansal]

Dear

Can we pay director remuneration more than 11% of profit , without  any permission of central govt.

 

[shanker bansal]

AI Summary

Public companies need central approval for director pay over 11% of profits; specific limits for MD/WD apply. A public company cannot pay director remuneration exceeding 11% of net profits without central government approval, as per sections 349 and 350. For a Managing Director (MD) or Whole-time Director (WD), the limit is 5% for one MD/WD, and 10% for multiple MD/WDs combined. Private companies not subsidiaries of public companies face no such restrictions. Central government approval is required only under specific conditions, such as economic offenses or specific age criteria. A company with a net profit of 75 lakhs must adhere to these limits, or face potential legal consequences for exceeding the 10% remuneration cap.