TaxTMI 
TaxTMI 
Conditions to be fulfilled for the appointment of a managing or whole-time director or a manager without the approval of the Central Government
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....(Development and Regulation) Act, 1951 (65 of 1951), (iv) the Prevention of Food Adulteration Act, 1954 (37 of 1954), (v) the Essential Commodities Act, 1955 (10 of 1955), (vi) the Companies Act, 1956 (1 of 1956), (vii) the Securities Contracts (Regulation) Act, 1956 (42 of 1956), (viii) the Wealth-tax Act, 1957 (27 of 1957), (ix) the Income-tax Act, 1961 (43 of 1961), (x) the Customs Act, 1962 (52 of 1962), (xi) the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969), (xii) the Foreign Exchange Regulation Act, 1973 (46 of 1973), (xiii) the Sick Industrial Companies (Special Provisions) Act, 1985 (1....
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....ission abroad. For this purpose, such person shall be required to furnish, along with the visa application form, profile of the company, the principal employer and terms and conditions of such persons appointment.] Part II Remuneration Section I.-Remuneration payable by companies having profits Subject to the provisions of section 198 and section 309, a company having profits in a financial year may pay any remuneration, by way of salary, dearness allowance, perquisites, commission and other allowances, which shall not exceed five per cent of its net profits for one such managerial person, and if there is more than one such managerial person, ten per cent for all of them together. Section II.-Remuneration payable by companies having no profits or inadequate profits ^[6][1. Notwithstanding anything contained in this Part, where in any financial year during the currency of tenure of the managerial person, a company has no profits or its profits are inadequate, it may pay remuneration to a managerial person by way of salary, dearness allowance, perquisites and any other allowances,- (A) not exceeding the ceiling limit of Rs. 24,00,000 per annum or Rs. 2,00,000 p....
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....tement alongwith a notice calling the general meeting referred to in clause (iii) is given to the shareholders containing the following information, namely:- I. General Information: (1) Nature of industry. (2) Date or expected date of commencement of commercial production. (3) In case of new companies, expected date of commencement of activities as per project approved by financial institutions appearing in the prospectus. (4) Financial performance based on given indicators. (5) Export performance and net foreign exchange collaborations. (6) Foreign investments or collaborators, if any. II. Information about the appointee: (1) Background details. (2) Past remuneration. (3) Recognition or awards. (4) Job profile and his suitability. (5) Remuneration proposed. (6) Comparative remuneration profile with respect to industry, size of the company, profi....
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....; (ii) the company has not made any default in payment of any of its debts (including public deposits) or debentures or interest payable thereon for a continuous period of thirty days in the preceding financial years before the date of appointment of such managerial person; (iii) a special resolution has been passed at the general meeting of the company for payment of remuneration for a period not exceeding three years; (iv) a statement along with a notice calling the general meeting referred to in clause (iii) is given to the shareholders containing the following information, namely:- I. General Information: (1) Nature of industry. (2) Date or expected date of commencement of commercial production. (3) In case of new companies, expected date of commencement of activities as per project approved by financial institutions appearing in the prospectus. (4) Financial performance based on given indicators. (5) Export performance and net foreign exchange collaborations. &....
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....r annum or Rs. 20,00,000 per month in respect of companies in Special Economic Zones as notified by Department of Commerce from time to time: Provided that these companies have not raised any money by public issue of shares or debentures in India: Provided further that such companies have not made any default in India in repayment of any of its debts (including public deposits) or debentures or interest payable thereon for a continuous period of thirty days in any financial year.] 2. A managerial person shall also be eligible to the following perquisites which shall not be included in the computation of the ceiling on remuneration specified in paragraph 1 of this section: (a) contribution to provident fund, superannuation fund or annuity fund to the extent these either singly or put together are not taxable under the Income-tax Act, 1961, (b) gratuity payable at a rate not exceeding half a month's salary for each completed year of service, and (c) encashment of leave at the end of the tenure. 3. In addition to the perquisites specified in paragraph 2 of this section, an expatriate manage....
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....and dependent parents of the managerial person. ^[8][Explanation IV.-For the purposes of this section, 'Remuneration Committee' means that a committee which consists of at least three non-executive independent directors including nominee director or nominee directors, if any. Explanation V.-For the purposes of this clause, the Remuneration Committee while approving the remuneration under this section shall,- (a) take into account, financial position of the company, trend in the industry, appointee's qualification, experience, past performance, past remuneration, etc. (b) be in a position to bring about objectivity in determining the remuneration package while striking a balance between the interest of the company and the shareholders. Explanation VI.-For the purposes of Paragraph I, "negative effective capital" means the effective capital which is calculated:- (a) in accordance with the provisions contained in Explanation I of this Part; (b) less than zero.] ^[9][Section III - Remuneration payable to a managerial person in two companies Subject to the provi....