Question
A company has net profits of ₹50 lakhs. What is the
maximum remuneration payable to a single whole-time director without Central Government approval under Companies Act, 2013?Solution
As per Section 197 of the Companies Act, 2013: • Maximum managerial remunerationto one whole-time director is 5% of the net profits of the company (computed as per Section 198), without Central Government approval. So, in this case: • Net profits = ₹50,00,000 • 5% of ₹50,00,000 = ₹2,50,000
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