Dear Seniors, Need a suggestion for my below query
Can a Major shareholder of a company be an employee? If so, he should be paid as salary with all benefits as like other employees or as Consulting fees?
Please share if there is any document related to the above query.

From India, Pondicherry
Dear Teenraj,

I am unable to understand the context of your question. Being a major share holder, one can become a director and thereby become the managing director of the company. A managing director is an employee of the company but not to the extent so as to be entitled to preferential payments. Thus a managing director occupies the dual role of an employee as well as the director of the company. I think from the above answer, you can cull out the answers to your other queries. Better you can go through section 2(54) of the Companies Act,2013.

From India, Salem

Pl clarify whether the Company is registered as per the Companies Act 2013. In general, it can be said that as a major shareholder, the person has certain roles and responsibilities but as an employee, the person is to act and behave like any other employee. The rules and regulations applicable to all employees would equally apply to the shareholder-employee. As a major shareholder, the person will have a say in many of the major decisions of the company and as an employee, he will have to implement it. In case the company is a registered one, then the provisions of the Companies Act will be applicable on the share holder.
From India, Mumbai
Dear Teenraj,

There is no issue an employee can have the shares of the company and can even the major shareholder of the company.

The employee continued to be an employee of the company with salary till he leaves the job. The share holding is nothing but an investment, so any individual can purchase these shares from the market and many a times company also allot shares among it's employee. The employee with major shares can be nominated as a Director or Managing Director or Chairman of the company on strength of his share holding. Your company secretary can give more details over the matter or Chartered Accountant to make you know each in details.

From India, Mumbai

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