Director Remuneration In Private Limited Company

This article explains about the director’s remuneration in private limited company. Directors ‘ remuneration includes pay, remuneration or reward for work earned by a private limited company’s administrative director. Companies Act, 2013, has certain limits on the payment of directors ‘ remuneration.


  • The Director’s remuneration includes pay, remuneration or remuneration for work done by an administrative person. The associated types of use made by a company are also referred to as administrative remuneration.
  • Total money spent by the Company in giving rent-free settlement, or some other advantage or luxury, for nothing out of pocket, to any of the company director and administrator.
  • Use made by the company to give any company director or administrator any other advantage or pleasantry complimentary or at a concessional rate.
  • Expenditure incurred by the Company in respect of any undertaking or administration acquired by any of the Company Directors or Supervisors for such use by the Company.
  • Expenditure caused by the company to affect the life of any company director and administrator or his / her life partner as well as the child or to give any benefit, annuity or tip for it.
  • Expenditure incurred by the Company for its administrative person to reimburse them against any risk of carelessness, default, error, breach of obligation or breach of trust for which they may be liable in connection with the Company and if such a person becomes liable, the premium paid on such protection would be treated as part of his remuneration.
  • Use of vehicles for individual support by the director caused by the company.



Either a managing director or a full- time director of a company can be paid:

  • By the method of Monthly Payment
  • At a predefined level of the net prof­its of the Company
  • Mostly by one and incompletely by the other.


Since, apart from the endorsement of the Central Govt, this compensation will not exceed 5% of the net benefit for one such executive and 10% for each of them. In the event of insufficient benefits, the company may, subject to the endorsement of the Central Governor, pay less compensation to its supervisory director and other management staff, not exceeding Rs. 50,000 for each year. This whole will be selective of any charges to be paid to managers. The increase in compensation for the supervisory directors requires the approval of the Central Govt.

Any arrangement or rearrangement of any such director for a higher compensation than his ancestor’s compensation will not be compelling without the approval of the Central Govt. In addition, in case it is opposed by the Central Govt, it will be avoided.

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