Tag Archives: Managerial Remuneration

Application to Central Government for appointment of Managerial Personnel


[NOTE: The law stated in this post is effective from 12th September 2018. For the law applicable from 1st April 2014 till 11th September 2018, please visit here.]

We discussed the appointment of managing director and whole time directors recently here as per the law effective from 12th September 2018. A careful reading suggests that recent amendment done away with the requirement of the central government for payment of remuneration of managerial personnel. This amendment also eased procedure for appointment of managerial personnel with the limited requirement for central government approval for such an appointment. We will discuss the same, in this post.

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Managerial Remuneration during period of inadequate profit


[NOTE: The law stated in this post is effective from 12th September 2018. For the law applicable from 1st April 2014 till 11th September 2018, please visit here and here.]

Any managerial remuneration exceeding 11% of net profit limit may be payable subject to compliance of conditions given in Schedule V.

Where a remuneration of managerial personal exceed respective limits of 1%, 3% 5%, or 10%  specified in section 197 in any manner, it becomes remuneration in case of the inadequate profit and attracts approval company in general meeting by special resolution, subject to the provisions of Schedule V.

We have discussed Section 197 as amended update 12th September 2018 earlier here. In this post, we will discuss managerial remuneration in case of inadequate profit as per Schedule V as on 12th September 2018.

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MANAGERIAL REMUNERATION


[NOTE: The law stated in this post is effective from 12th September 2018. For the law applicable from 1st April 2014 till 11th September 2018, please visit here and here.

In this post, we will discuss managerial remuneration. The managerial remuneration in case of inadequate profit shall be discussed in a future post, soon.

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APPOINTMENT OF MANAGING DIRECTOR AND MANAGER


[NOTE: The law stated in this post is effective from 12th September 2018. For the law applicable from 1st April 2014 till 11th September 2018, please visit here.]

The Managing Director is Key Managerial Personnel of utmost importance. He is the face of a company and its decision-making mechanism. A person gains significant advantages as the Managing Director which may not be there, in case of his appointment as the Manager or the Chief Executive Officer. While the Chief Executive Officer has no special advantage except his clubbing as a Key Managerial Personnel with the Manager and the Managing Director, the Manager has some advantage. Their definitions speak themselves. Appointment of Managing Director, Whole – Time Director and Manager is governed by the provision of Section 196 of the Companies Act, 2013. They all are a different class of Key Managerial Personnel and has the specific provision of appointment in addition to Section 203, discussed in an earlier post. Continue reading

Amendment in Schedule V


Ministry of Corporate Affairs, on 12th September 2016 issued notification amending Schedule V of the Companies Act, 2013. Schedule V deals with managerial remuneration in cases of inadequate profit and to some extend managerial appointment in public companies.

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Recent Amendments in Managerial Remuneration Rules


Ministry of Corporate Affairs came with amendment to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, last month. These rules has been published in official gazette on 30th June 2016 and came into force on that date. In this post, we will discuss these amendments.

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REPORT OF THE COMPANIES LAW COMMITTEE – 6


On 1st February 2016, Ministry of Corporate Affairs uploaded the report of Companies Law Committee on its website here. In 6th post on this report, we will discuss recommendations of the committee related to Related Party transaction, Audit Committee, Managerial Remuneration, Key Managerial Personnel, etc.

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