Gazette notification GSR 534(E) dated 14/07/2011-clarification regarding - Employee of a company holding shares of company up to 0.5% of paid up share capital also covered under category of persons not having any interest in capital of company - F. No. 14/11/2012-CL-VII - Companies Law

MCA Clarifies Employees with Up to 0.5% Share Capital Have No Capital Interest Under Companies Act, 1956 Rules

The Ministry of Corporate Affairs clarifies that employees holding up to 0.5% of a company's paid-up share capital, including shares obtained through schemes like the Employees' Stock Option Plan (ESOP) or qualification shares, are considered as not having any interest in the company's capital. This clarification relates to the Gazette Notification GSR 534(E) dated 14th July 2011, which exempts companies from needing Central Government approval for remunerations exceeding limits set by the Companies Act, 1956, for managerial personnel not having capital interest or relations with directors or promoters.