Unlisted Companies Shall not Require Government Approval for Managerial Remuneration Where they have no Profits

---------- Forwarded message ----------
From: ATUL KULKARNI <atulvkulkarni@gmail.com>
Date: Tue, Feb 8, 2011 at 10:22 PM
Subject: Re: Message from EGroup of SolapurCAs Fw: {Amresh's CA's} Unlisted Companies Shall not Require Government Approval for Managerial Remuneration Where they have no Profits
To: SolapurCAs@yahoogroups.com


On 2/8/11, Deepak Gadgil <gadgildeepak2000@yahoo.com> wrote:
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> CA Deepak Gadgil,
> Solapur, Maharashtra
> 9422068273 / 9960633199
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> --- On Tue, 8/2/11, CA Vashisht Amresh-Moderator <amresh_vashisht@yahoo.com>
> wrote:
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> From: CA Vashisht Amresh-Moderator <amresh_vashisht@yahoo.com>
> Subject: {Amresh's CA's} Unlisted Companies Shall not Require Government
> Approval for Managerial Remuneration Where they have no Profits
> To: ICAI_CIRC_MEERUT_CA@yahoogroups.com
> Date: Tuesday, 8 February, 2011, 9:09 PM
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> Unlisted Companies Shall not Require Government Approval for Managerial
> Remuneration Where they have no Profits
>
> The Ministry of Corporate Affairs issued today a notification on Managerial
> Remuneration in unlisted companies having no profits/inadequate profits. The
> notification reads as under:
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> Managerial Remuneration in unlisted companies having no profits/ inadequate
> profits
>
> Companies are divided into private limited and public limited companies.
> Public limited companies are of two types â€" listed companies (whose shares
> are listed on a stock exchange) and unlisted companies. Normally, the
> general public does not hold shares in unlisted companies. Private limited
> companies are not subject to any limits on managerial remuneration. Public
> limited companies (listed and unlisted) with no profits/ inadequate profits
> are currently required to approach the Ministry for approval in those cases
> where the remuneration of Directors/ equivalent managerial personnel exceeds
> certain limits.
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> 2. The matter has been re-examined in the light of the evolving economic and
> regulatory environment. The primary purpose of regulations over managerial
> remuneration is to protect stakeholders, particularly shareholders and
> creditors. Unlisted companies are in several respects similar to private
> limited companies. A substantial number of the applications coming to the
> Ministry fall under this category and the Ministry’s limited manpower is
> disproportionately involved in this exercise. In the case of unlisted
> companies so long as the conditions specified in Schedule XIII, including
> special resolution of shareholders and absence of default on payment to
> creditors, are fulfilled approval will not be needed hereafter.
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> 3. Accordingly, Schedule XIII of the Companies Act 1956 is being amended to
> provide that unlisted companies (which are not subsidiaries of listed
> companies) shall not require Government approval for managerial remuneration
> in cases where they have no profits/ inadequate profits, provided they meet
> the other conditions stipulated in the Schedule.
>
> CA AMRESH VASHISHT, FCA, DISA
> Member,ICAI Committee For Capacity Building of CA Firms & Small & Medium
> Practioner
> Moderator,http://in.groups.yahoo.com/group/ICAI_CIRC_MEERUT_CA
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