No government appr-oval would required for public companies for paying salaries beyond a certain threshold to their managerial personnel, an official release said on Friday.
No government appr-oval would required for public companies for paying salaries beyond a certain threshold to their managerial personnel, an official release said on Friday. The ministry of corporate affairs has amended provisions under the Companies Act, 2013 in this regard. Under the Companies Act, 2013, the companies having more than 200 members are classified as public companies and they have to follow stricter corporate governance norms.
Now, such payments can be approved by a company’s shareholders through a special resolution, it said. However, if a company has defaulted in payment of dues to any bank, financial institution or non-convertible debenture holders, approval of the entity concerned would be required before the remuneration proposal is put up to the shareholders, the release said.
According to the government, the move is in pursuance of the policy of minimum government-maximum governance and providing ease of doing business to law-abiding corporates of the country. “With the issue of the notification, all pending applications submitted to the ministry for approval of proposals for payment of managerial remuneration in excess of the limits laid down, would automatically abate and companies are free to obtain requisite approvals for those proposals, from the shareholders within one year,” the release said.