Section 197 is applicable only on Public Limited Companies.

Private Limited Companies are out of preview of this section. There is no limit on remuneration for Private Limited Companies, they can pay any amount of remuneration without complying with the provision of Section 197 and Schedule V of the Companies Act, 2013.

Refer the following issued by ICSI

 JULYCOMPANY_LAW_CORNER1.pdf

Hello professionals,

As per the provisions of  Section 197(1) of companies act 2013

rprovisions of total managerial remuneration i.e 11% of net profit of that financial year and limit on managerial remuneration of individual directors is applicable on Public company.

the text of section 197(1) is quoted here for your reference.

(1) The total managerial remuneration payable by a public company, to its Directors, including managing director and whole-time director, and its manager in respect of any financial year shall not exceed eleven per cent. of the net profits of that company for that financial year computed in the manner laid down in section 198 except that the remuneration of the Directors shall not be deducted from the gross profits:

hope it is helpful to you,

Thank you !

No limit on the remuneration of a director of a private company is mentioned in Companies Act, 2013.

Section 197 talks about Menegerial Remuneration which is not applicable on Private Companies.