Companies Act Section 200 — Central Government or company to fix limit with regard to remuneration

CHAPTER XIII APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL

Commercial / Corporate

Summary

A company that is approving an appointment or remuneration under sections 196 or 197, in a situation where the company has inadequate or no profits, may set the remuneration at any amount or percentage of profits it considers fit, as long as it stays within the limits specified in this Act. This applies despite anything else contained in this Chapter.

While fixing such remuneration, the company must take into account the following factors:

Under clause (a), the company must consider its own financial position.

Under clause (b), the company must consider the remuneration or commission that the individual concerned already draws in any other capacity.

Under clause (c), the company must consider the remuneration or commission that the individual draws from any other company.

Under clause (d), the company must consider the professional qualifications and experience of the individual concerned.

Under clause (e), the company must consider such other matters as may be prescribed.

Official Text

Notwithstanding anything contained in this Chapter, 1*** a company may, while according its approval under section 196, to any appointment or to any remuneration under section 197 in respect of cases where the company has inadequate or no profits, fix the remuneration within the limits specified in this Act, at such amount or percentage of profits of the company, as it may deem fit and while fixing the remuneration, 1*** the company shall have regard to—

(a) the financial position of the company;

(b) the remuneration or commission drawn by the individual concerned in any other capacity;

(c) the remuneration or commission drawn by him from any other company;

(d) professional qualifications and experience of the individual concerned;

(e) such other matters as may be prescribed.