Can sitting fees be paid to non-executive directors?
Sitting Fee: The Non-executive Director(s) shall receive Sitting fees for attending meetings of the Board or Committee thereof or any other meeting as may be required to discharge their duties as directors not exceeding the limits prescribed under Companies Act, 2013 read with Companies (Appointment and Remuneration of …
Is it mandatory to pay sitting fees to directors?
As per Section 16 read with Section 192 of Income Tax Act, 1961, all directors remuneration are treated as Salary and will be taxable under the head “Salary” and Company is required to deduct TDS except the sitting fees.
Can we pay professional fees to directors?
As per the provision of Section 188 of the Companies Act, 2013, the Audit Committee and the Board of Directors of the Company shall approve the Professional fees to be paid to Non-Executive Director(s), and with the approval of the Shareholders where ever required.
How much do independent directors get paid?
In the case of firms with an effective capital that is either ‘negative’ or less than ₹5 crore, the maximum annual remuneration has been pegged at ₹12 lakh per non executive director; for firms with an effective capital of ₹5-100 crore, the limit has been set at ₹16 lakh; for companies with ₹100-250 crore, the limit is …
Who is eligible for sitting fees?
Non Executive Directors are eligible for fixed amount of sitting fees for attending meeting of the Board of Directors and its committees. The Independent Directors are not eligible for Stock Options. The Chairman of the meeting is entitled for a sitting fees of Rs.
Should non executive directors be on payroll?
The rules are in place to ensure they are treated in the same way as any other employee and despite the fact that a NED may enjoy a considerable degree of autonomy, payments made to a NED for their role as an office holder must be made through the payroll, accounting for both PAYE and class 1 NIC, including employer’s …
What are the risks of being a non executive director?
Legal risks for non-executive directors
- Due Diligence.
- Has the director been negligent?
- Time commitment – be clear.
- Conflicts of Interest for company directors.
- Protecting yourself as a non-executive director.
What is director’s fee?
Directors Fees means the annual fees paid by any Employer, including retainer fees and meetings fees, as compensation for serving on the board of directors.
Can a non executive director receive a sitting fee?
The Non-Executive / Independent Directors may receive sitting fees and such other remuneration as permissible under the provisions of Companies Act, 2013. The amount of sitting fees shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors.
How are independent directors paid under the Companies Act?
Section 149 (9) of the Companies Act, 2013 states that independent director may receive remuneration by way of fee provided under sub-section (5) of section 197, reimbursement of expenses for participation in the Board and other meetings and profit related commission subject to resolution of the shareholders duly passed at a general meeting.
Do you get paid for sitting on board of directors?
Therefore, they can be paid sitting fees for attending meeting of Board of Directors of a company. Though generally the Managing / Whole-time Directors of companies are not paid any sitting fees for attending meeting of board of directors of the company.
Can a non executive director of a company be paid remuneration?
As per the provisions of Section 197 (5) read with Schedule V of the Act, if company has no profits in any financial year,only managerial personnel are entitled to remuneration. Hence, it cannot pay remuneration to its non-executive directors (Including Independent Director) except the sitting fees.
