Payment of Remuneration to a Director Simplicitor RE: ED is WTD, if he is Appointed as such RE: Specific sub-section of 196 RE: [CSMysore] WTD

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Chandravijay Shah & Co. Gmail Main

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Jan 4, 2021, 5:20:43 AM1/4/21

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Legal Provisions reproduced vide Trailing E-mail need to be Analysed.

Even if the same are endorsed at face value without further Analysis / Interpretation for the time being, a Private Limited Company need not Designate the concerned Director, to whom Remuneration is proposed to be paid, as ED and still pay him appropriate Remuneration. No embargo on Payment of Remuneration to a Director Simpliciter qua a Private Limited Company.

From: csmy...@googlegroups.com [mailto:csmy...@googlegroups.com] On Behalf Of Premnarayan Tripathi
Sent: 04 January 2021 14:38
To: csmy...@googlegroups.com
Subject: RE: ED is WTD, if he is Appointed as such RE: Specific sub-section of 196 RE: [CSMysore] WTD

Dear Friend,

Please consider below;

· Definition of WTD is given under sec. 2(94):-

(94) "whole-time director" includes a director in the whole-time employment of the company;

· Definition of ED is given under Rule 2(k) of the Companies (Specification of Definitions Details) Rules, 2014:-

2(k) “Executive Director” means a whole time director as defined in clause (94) of section 2 of the Act;

Hence, if there exists an Employer-Employee Relationship between the Company and Director, and he draws ‘salary’ as such, then he must be appointed as a WTD by following procedure laid down in section 196 of the Act. And DIR 12 should be filed accordingly.

Thanks & Regards,

Premnarayan Tripathi

PRT & Associates

Company Secretaries

606, 6^th Floor, Shivalik Square

Nr. Adani CNG Pump, 132 Ft. Ring Road

New Vadaj, Ahmedabad – 380013

M: 89800 26497

From: csmy...@googlegroups.com [mailto:csmy...@googlegroups.com] On Behalf Of Ekta Saxena
Sent: Monday, January 4, 2021 1:44 PM
To: csmy...@googlegroups.com
Subject: Re: ED is WTD, if he is Appointed as such RE: Specific sub-section of 196 RE: [CSMysore] WTD

Thanks alot Sir for such a prompt response.

Sir, Can i get any reference or justificatication on this.

On Mon, Jan 4, 2021 at 1:40 PM Chandravijay Shah & Co. Gmail Main <chandrav...@gmail.com> wrote:

Private Limited Company:

ED is a WTD, if he is Appointed as WTD, not otherwise.

From: csmy...@googlegroups.com [mailto:csmy...@googlegroups.com] On Behalf Of Ekta Saxena
Sent: 04 January 2021 13:30
To: csmy...@googlegroups.com
Subject: Re: Specific sub-section of 196 RE: [CSMysore] WTD

my question is whether all executive directors are whole time directors? That means form dir 12 for wtd is necessary required to file in that case?
Cant a director of the company be executive director? he necessarily needs to be appointed as wtd?

On Mon, Jan 4, 2021 at 1:28 PM Ekta Saxena <csektas...@gmail.com> wrote:
[(4) Subject to the provisions of section 197 and Schedule V, a managing director, whole-time director or manager shall be appointed and the terms and conditions of such appointment and remuneration payable be approved by the Board of Directors at a meeting which shall be subject to approval by a resolution at the next general meeting of the company and by the Central Government in case such appointment is at variance to the conditions 5[Specified in Part I of that Schedule]
Provided that a notice convening Board or general meeting for considering such appointment shall include the terms and conditions of such appointment, remuneration payable and such other matters including interest, of a director or directors in such appointments, if any:
Provided further that a return in the prescribed form shall be filed within sixty days of such appointment with the Registrar.
(5) Subject to the provisions of this Act, where an appointment of a managing director, whole-time director or manager is not approved by the company at a general meeting, any act done by him before such approval shall not be deemed to be invalid.]

On Mon, Jan 4, 2021 at 1:27 PM Chandravijay Shah & Co. Gmail Main <chandrav...@gmail.com> wrote:
Please share specific sub-section of 196.

From: csmy...@googlegroups.com [mailto:csmy...@googlegroups.com] On Behalf Of Bharti Ahuja
Sent: 04 January 2021 13:01
To: CSMysore
Subject: Re: [CSMysore] WTD

Yes, as per section 196

On Mon, Jan 4, 2021, 12:47 Ekta Saxena <csektas...@gmail.com> wrote:
EVERY DIRECTOR OF PVT. CO. DRAWING SALARY AND DEVOTING FULL TIME, NEEDS TO BE APPOINTED AS WTD?

Thanks
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