Question

According to the Companies Act, 2013 the total managerial remuneration by a public company, to its directors in respect of any financial year shall not exceed ___ of the net profits of that company for that Financial year.

• A. 10 percent
• B. 11 percent
• C. 13 percent
• D. 15 percent

Answer 1

The correct option is B 11 percent

Section 197 of the Companies Act, 2013 provides a way to pay managerial remuneration in case of Company’s having adequate profits. A Public Company can pay remuneration to its directors including Managing Directors and Whole-time Directors, and its managers which shall not exceed 11% of the net profit as calculated in a manner laid down in section 198 of the Companies Act, 2013.