MCA Amends Provisions Relating To Remuneration For Independent Directors And Other Amendments: KPMG
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Currently under Section 197(3) of the Companies Act, 2013, in case of no profits or inadequacy of profits, a company is not allowed to pay any remuneration (other than sitting fee) to its directors, including managing director, whole-time director or manager, except as provided under Schedule V to the 2013 Act.
The Companies (Amendment) Act, 2020 introduced amendments to Section 149 and 197 of the 2013 Act, to provide remuneration for non-executive directors, including independent directors, in case of inadequacy of profits in a manner similar to executive directors.
The 2020 Amendment Act received the assent of the President of India on September 28, 2020.
Many sections of the 2020 Amendment Act were notified on Dec. 21, 2020, Jan. 22, 2021 and Feb. 11, 2021 by the Ministry of Corporate Affairs.
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