What is the ordinary overall limit on a public company’s managerial remuneration under section 197(1) of the Companies Act, 2013, expressed as a percentage of net profits?
Question and options
What is the ordinary overall limit on a public company’s managerial remuneration under section 197(1) of the Companies Act, 2013, expressed as a percentage of net profits?
8%
15%
11%
5%
Answer and explanation
Section 197(1) of the Companies Act, 2013 caps the total managerial remuneration of a public company at 11% of its net profits for the year, computed under section 198. Five per cent is the separate cap for any one managing or whole-time director or manager, and the company may exceed the overall limit with a special resolution.
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