MCA doubles limit of managerial remuneration payable by Cos. having no profit or inadequate profit

MCA has notified the revised Remuneration Limits for the Companies having no or inadequate profits as per Schedule V of the Companies Act, 2013. To align the interest of managerial person in companies, it has been decided to amend the Schedule V of the companies act for enhancing the managerial remuneration payable by the companies having no profit or inadequate profit it its managerial person.

The following points have been kept in mind by the companies while calculating the managerial remuneration:

i) Where effective capital is negative or less than 5 crores, then a company can pay upto Rs. 60 lakhs (earlier the limit was Rs. 30 lakhs) per annum as a remuneration to its managerial person.

ii) If effective capital is more than 5 crores but less than 100 crores, then a company can pay upto Rs. 84 lakhs (earlier it was Rs. 42 lakhs)

iii) If capital more is than 100 crores but less than 250 crores, than in that case company can pay Rs. 120 lakhs (earlier it was Rs. 60 lakhs).

iv) Now at last, if effective capital is more than 250 crores, then company would give Rs. 120 lakhs (earlier it was Rs. 60 lakhs) with 0.01% of the effective capital in excess of Rs. 250 crores Further, MCA has clarified that managerial person who is functioning in a professional capacity, no approval of Government is required if such managerial person is not having any interest in the capital of the Company, its holding company or any of its subsidiary companies during last 2 years on or a􀁺er date of appointment and possesses graduate level qualification and specialized knowledge in field of which the Company operates.