MANAGERIAL REMUNERATION IN ABSENCE OF PROFIT OR INADEQUATE PROFIT

Most of time a situation may arise when company does not have enough profit but still company needs to pay its KMP a hefty amount to retain the talent in the company. Therefore, it is important to know what compliances are needed to be done to pay managerial remuneration in case of no profits.

PROCEDURE:

  1. Hold a meeting of the Nomination and Remuneration Committee (NRC) to discuss the salary.
  2. Then, hold a meeting of the Board to consider the recommendation of NRC and pass the resolution
  3. Hold EGM to pass the special resolution for the proposed salary. Instead of holding EGM, this approval can be taken through postal ballot also [where a member is more than 200]
  4. Then again hold a Board Meeting to execute the shareholder approval
  5. Since it is a special resolution, so file the copy of same with ROC in Form MGT-14

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