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As per new CA-13, in case of appointment of KMP we hv to file Form MGT-14 as well as MR-1.In a private companies wher the KMP is not required, if we appoint a Director as a whole time Director, do we need to file the above two forms and also require to follow the sch V for payment of remuneration or we can appoint the person as a non executive Director and pay any remuneration as remuneration restrictions are not applicable to private companies.will Paying a full fledged remuneration make him a whole time director

Director

Posted By: Anita 10 year(s) ago

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Expert    Ankit Singhi

In case you appoint KMP you have to file form MGT-14 and MR-1, since the section is applicable to all type of companies,. Comply schedule V when company is in losses

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    Mayur Mehta

Private company is exempted from having Key Managerial Personnel. Section 197 of the Act provides limit on the remuneratioh of Directors for public company. Therefore private company can pay remuneration without restirctions not related to the profits of the company. It will not be subject to schedule V and accordingly no need to file MR.1. However if you appoint executive director (WTD ) then form DIR 12 would be required for change in designation. This is necessary to comply with section 2(60) regarding Officer in Default. If the company is manufacturing company it would help in filing returns under various labour laws. There is no bar under the Act to pay remuneration to non-executive directors subject to the Articles of Association. If the director is occuping Office of Profit section 188 applies for the time being. If the draft notification on exemption to private company is accepted then section 188 will not apply to private company.

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