Salary to non executive directors

[anjali bansal]

Dear Friends

 

Can a Private Company or a Private Company, subsidiary of Public Co. pay Salary to its non executive directors? is there any restriction or mandate to pay sitting fees ony.

 

If salary can be paid, then what should be the limits and formalities for the same.

 

Can such directors draw salary from 5-6 cos. at the same time. Assuming he is a non executive director in all the cos.

 

Pls treat this as very urgent

 

Thanks

 

Anjali

[shankar shankar]

hai
to pay monthly remuneration to NWTD, prior approval of CG is mandatory. pls refer S.309(4)(a) OR if the Director has professional qualification then you can under S.309(1)(b) by obtaining the approval of CG (expression of opinion) pay remuneration to such Director.

 

Anjali

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With Regards,
CS K.Sankara Subramanian,

            B.A.B.L., ACS
Cethar Energy Limited, Trichy.

[ravinder kumar]

Dear Anjali,

Yes a Private Co. and a Subsi of Public Co. can pay salary to its Non-Executive Directors u/s 309(4).

This can be in form of :

1. Monthly/Quarterly/Annauly with CG Approval or 

2. Commission if authorized by way of SR

Limits are: 1. if co. has one or more MD/ WTD/ Manager than 1 % of net profits to any one or all such part-time directors, or

                 2. If co. has no MD /WTD / Manager than 3 % of net profits

Futher such directors can withdraw salary form other Co(s) and no restriction and is allowed. The MD/ WTDs of Co. receiving any salary or commission from holding Co. can not withdraw any salary from subsi Co.

So if such person in only part-time director in all companies than he can draw salary in companies and no problem.

Regards

Ravinder Kumar

9654340198

On Mon, Jul 30, 2012 at 12:52 PM, anjali bansal <anjali.b...@gmail.com> wrote:

 

Anjali

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[anjali bansal]

Dear Shankar Ji

 

Do we need to comply with section 309 in case of purely private Companies. Also, explain if drawing salary from more than one co. is permitted as per the provisions of Income Tax Act.

 

 

Thanks

 

Anjali

[shankar shankar]

Private Companies are exempted from the purview of S.309 [S.309(9)]

Regarding IT Provisions I have to look at it and then only could suggest you.

[anjali bansal]

Going forward, if some of the Companies are private companies and some are subsidiaries of public cos., what provisions do we need to follow. Is the Central Govt approval is required. Is the approval required in case of sitting fees also. and If a directors draws sitting fees from more than one company, do we have to follow the limites of 1% and 3% as mentioned in section 309.

 

Pls take time to guide me

[shankar shankar]

hai

if it is a Pvt. Company NOT A SUBSIDIARY OF A PUBLIC COMPANY, then S.309 will not apply.

if it is a Pvt. Company WHICH IS A SUBSIDIARY OF A PUBLIC COMPANY, then S.309 will apply.

For Sitting Fee refer S.310 first Proviso. In case of Public Company, Sitting fees paid to MD / WTD forms part of Managerial Remuneration and whereas it will not be included in the case of NWTD Director(s). Hence the question of 1% or 3% or Central Govt approval does not arise.