What is effective capital for managerial remuneration?
— For the purposes of Section II of this Part, “effective capital” means the aggregate of the paid-up share capital (excluding share application money or advances against shares); amount, if any, for the time being standing to the credit of share premium account; reserves and surplus (excluding revaluation reserve); …
How much should maximum remuneration payable by a company to its managerial personnel their effective capital is 5 crore and above but less than hundred crore?
(i) Remuneration payable by companies having profits: A company having profits in a financial year may pay remuneration to a managerial person or persons or other director or directors not exceeding the limits specified in section 197. 5 crores and above but less than 100 crores.
What is maximum limit of managerial remuneration?
11%
The Company may pay the remuneration to the managerial personnel exceeding total limit of 11% of net profit with the approval of members at the general meeting subject to the provisions of Schedule V of the Companies Act, 2013.
What is included in managerial remuneration?
According to the provisions of Section 197 of the Companies Act 2013 the overall remuneration paid by the public company to its directors including managing director and wholetime director and its manager in relation to the financial year shall not exceed 11 % of net profits of the company.
How do you find effective capital?
Amount (Rs.)
- Paid-up share capital. (excluding share application money or advances against shares)
- Share premium account.
- Reserves and surplus. (excluding revaluation reserve)
- Long-term loans and deposits repayable after one year.
- Investments.
- Accumulated losses.
What is effective capital show the format of effective capital?
Effective capital means the aggregate of the paid-up share capital (excluding share application money or advances against shares); amount, if any, for the time being standing to the credit of share premium account; reserves and surplus (excluding revaluation reserve); long-term loans and deposits repayable after one …
How do you calculate effective capital?
Calculation of Effective Capital : Particulars(Amount in ₹)1) Paid up Share Capital ( excluding Share application money)2,99,99,0002) Reserves and Surplus ( excluding revaluation reserve )12,19,142Total (A)3,12,18,1421) Accumulated losses31,37,504Total (B)31,37,504Effective Capital (A-B)2,80,80,639 Since the effective …
What is the permissible managerial remuneration payable under the Companies Act 2013?
11% of
The overall maximum managerial remuneration payable by a public company u/s 197 of companies act, 2013, shall not exceed 11% of net profit for that financial year. Provided that, company can pass a special resolution in general meeting for payment of managerial remuneration more than 11% of the net profit.
What is effective capital of a company?
Effective Capital means the aggregate of the paid-up share capital( excluding share application money or advances against shares); amount, if any for the time being standing to the credit of share premium account; reserves and surplus (excluding revaluation reserve); long-term loans and deposits repayable after one …
Is ESOP part of managerial remuneration?
Once the perquisite value of ESOPs is treated as ‘remuneration’ under the Act, then the provisions of Section 197 of the Act and Regulation 17(6)(ca) of Listing Regulations would become applicable, which requires shareholder approval by a special resolution.
What is effective capital in simple words?
What is Effective capital in partnership?
The effective capitals are the capitals of the partners with respect to the number of months these have been used in the business during an accounting year, and can to be calculated as under: Partner’s Capital. Number of months it remained in business. Product.
What are the examples of Managerial Remuneration?
For Examples:- Directors ,MD, Managers or person having same designations etc. Managerial remuneration is given on the basic of net profit. In case of shortage of profit or absence of profit it can be given on the basic of effective capital.
Which type of profit is used for Managerial Remuneration?
For the managerial remuneration we use net profit and effective capital. Now we are going to explain that:- As per the provisions, profit for the purpose of managerial remuneration should be calculated separately. The following statement can be prepared for the calculation of net profit.
When can a company pay remuneration to a manager?
Where in any financial year during the currency of tenure of a managerial person or OTHER DIRECTOR a company has no profits or its profits are inadequate it may pay remuneration to the managerial person or OTHER DIRECTOR not exceeding the limits under (A) and (B) given below:
Can a company pay remuneration to a managerial person without government approval?
In the following circumstances a company may, without the Central Government approval, pay remuneration to a managerial person in excess of the amounts provided in Section II above:-