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    Salary to Non Executive Director

    Posted By : Shiriti / Published on : 07-Oct-2020 10:56 AM / View : 433 / Comment : 1

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    Can we pay salary to Non Executive Director?
    Read more on : director executive salary

    • Dear Mam

      The payment of remuneration to the Directors is stated under the proviso of sub-section 1 of section 197 of the companies Act, 2013.

      Relevant Proviso:

      Provided further that, except with the approval of the company in general meeting by a special resolution—

      (i) the remuneration payable to any one managing director; or whole-time director or manager shall not exceed five per cent. of the net profits of the company and if there is more than one such director remuneration shall not exceed ten per cent. of the net profits to all such Directors and manager taken together;

      (ii) the remuneration payable to Directors who are neither managing Directors nor whole-time Directors shall not exceed,—

      (A) one per cent. of the net profits of the company, if there is a managing or whole-time director or manager;

      (B) three per cent. of the net profits in any other case.

      As per the clause (ii) of this proviso, the company can pay remuneration to non-executive directors not exceeding one percent or three percent as the case may be.

      Hope it helps!

      Thank You!

      06-07-2022 / 05:59:57 AM
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