Commission based on Sales to Director of Pvt. Ltd. Company

VISHAL KUMAR CHOUDHARY (Querist) 21 August 2010 This query is : Resolved
Director of Private limited company wants to draw commission based on sales in excess of present salary which is around Rs. 10Lacs p.a., please suggest whether there is any problem and legal compliance, if any

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VENKATRAMAN SHRINIVAS (Expert) 22 August 2010
There is absolutely no bar in th director of a closely held company drawing commission which may far exceed his salary.What all the company has to do is, to pass a resolution and record in the minutes, justifying he payment.. It has to clearly identify the buoyancy in sale and the effort of the director in achieving it, which warants a reward in the form of commission/enhancd commission.. These are the legal requirements.

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