Dear All,
My Managing Director recently called me and told me that all people in the company, including him and other directors, are to be taken on the payroll of the company. He also mentioned that he should be given PF, professional tax, and other benefits exactly in the same manner as a regular employee.
We are a Pvt. Ltd. Company.
Question on Director's Employment Status
Now, my question is: can a Director or Directors be treated as an employee of the company? Can we allow them to have Provident Fund and other benefits? Kindly provide a reference to the Act or judgment.
Regards,
Govind
From India, Mumbai
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87My Managing Director recently called me and told me that all people in the company, including him and other directors, are to be taken on the payroll of the company. He also mentioned that he should be given PF, professional tax, and other benefits exactly in the same manner as a regular employee.
We are a Pvt. Ltd. Company.
Question on Director's Employment Status
Now, my question is: can a Director or Directors be treated as an employee of the company? Can we allow them to have Provident Fund and other benefits? Kindly provide a reference to the Act or judgment.
Regards,
Govind
From India, Mumbai
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Whole-Time Director and Managing Director
Any director in the company receiving remuneration and perquisites would be termed as a whole-time director. The Managing Director is also a whole-time director. The terms of appointment of a whole-time director may contain benefits and facilities on par with other employees.
Regards,
Suryanarayana SV
Practising Company Secretary
Hyderabad, India
http://www.suryanarayana.com
From India, Hyderabad
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Any director in the company receiving remuneration and perquisites would be termed as a whole-time director. The Managing Director is also a whole-time director. The terms of appointment of a whole-time director may contain benefits and facilities on par with other employees.
Regards,
Suryanarayana SV
Practising Company Secretary
Hyderabad, India
http://www.suryanarayana.com
From India, Hyderabad
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Yes the PF can be diducted from the salary of a Director but in the accounts book you need to enter the salary of director as Directors Remuneration not as salary. Vijay
From India, Delhi
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From India, Delhi
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Yes I do agree with Mr. Vijay, in fact director is first employee of the company. Regards, S. Vishwanath
From India, Hyderabad
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From India, Hyderabad
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I agree with Hyderabad, India, Suryanarayana S V's reply above but with the following qualifier:
The director of a private limited company owning a factory who has been appointed as its 'Occupier' under the Factories Act, 1948, cannot claim to be an 'employee'. He is treated as the 'employer', the person having ultimate control over the affairs of the factory.
From India
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The director of a private limited company owning a factory who has been appointed as its 'Occupier' under the Factories Act, 1948, cannot claim to be an 'employee'. He is treated as the 'employer', the person having ultimate control over the affairs of the factory.
From India
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Thanks a lot for your prompt response. This information is useful for me. Special thanks to Mr. Suryanarayana SV and Professor B J Bhadavle. Regards Govind
From India, Mumbai
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From India, Mumbai
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Hi, Is the employer contribution to the Provident Fund through Employer Provident Fund Organisation (EPFO) is tax exempted? I am little confused about it. Please guide
From India, Mumbai
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From India, Mumbai
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Provident Fund Contribution and Tax Implications
Employer contribution toward PF is exempted up to 12% for all Recognised Provident Funds. However, if the employee withdraws the balance before 5 years of service, it will be taxable at the time of withdrawal.
Regards,
VENUGOPAL
From India, Bangalore
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Employer contribution toward PF is exempted up to 12% for all Recognised Provident Funds. However, if the employee withdraws the balance before 5 years of service, it will be taxable at the time of withdrawal.
Regards,
VENUGOPAL
From India, Bangalore
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