Remuneration of directors in Nigeria

Remuneration of directors in Nigeria

May 07, 2019

As defined by the Companies and Allied Matters Act (CAMA), directors are persons that are duly appointed by the company to direct and manage the business of the company. The CAMA also made provisions on the remunerations of company directors.

Ordinarily, a company is not bound to pay remuneration to a director but where a company chooses to pay remuneration such remuneration will be taken from the companies’ fund.

Accordingly, remunerations for directors are determined by the company at its General Meeting and it is calculated on a daily basis.

A director however, is to be paid any travelling expenses, hotel bill and any other bill he might incur in the course of performing his duty as a director for the company.

Where the remuneration of a company director has been fixed by an Article, it can be altered by a special resolution.

Where a director’s remuneration is based on the Article of Association, it shall be a debt to the company, they can sue the company on the basis of debt or prove it during liquidation

A director is strictly prohibited from receiving more money than what he is entitled.

A managing director of a company on the other hand is entitled to remuneration and it can be by way of salary, commission, participation in profits , partly in one way or another but as determined by the Board of directors.

A director’s remuneration must not be tax free and a company is prohibited from granting loans to a director unless on exception cases such as;

  1. Where part of the company’s objective is lending money or giving guarantees in connection with loans and even as such it must be approved first at a General Meeting of the company.
  2. Where such a loan is for the expenditure incurred by the director for the purpose of the company or to enable him perform his duty in the company.

 

 

The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer. This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached

More Articles

Search

Connect With Us

Got any questions?

If you are having any questions, please feel free to ask.

Send us an email

Frequently Asked

  • What additional documents do I require to file my Annual Returns?
  • What is the first thing I must do to register a business in Nigeria?

    To register a business in Nigeria; you would need to conduct a name search of the business. You can achieve this using your CAC-CRP account.

  • Why is mutual assent important in a contract?

    This is one of the key elements of a contract because is shows the meeting of the minds of both parties

  • What is SON?

    SON stands for ‘Standards Organization of Nigeria’

  • Is it legal to transfer the personal data you obtained legally to another person?

    No, its not legal. This is because the law prohibits anyone from transferring the data of a third party to another person without consent from the third party to do same even if the data was rightfully obtained in the first instance.

  • Can I grant another person the permission to use my design?

    The right of the owner of an industrial design includes the licensing and authorization of another person to use the design.

  • Can I process/register multiple products at NAFDAC at the same time?

    Yes, you can process/register multiple products at the same time

  • How many shareholders do I need to start a company?

    A minimum of two (2) shareholders is required to form a company.

  • How long does a trademark registration in Nigeria Last?

    Trademark is valid for seven years from the date of application but you may renew the application for the trademark for an additional period of 14years.

Call Us Now on +234 901 719 0079 Whatsapp icon Chat on WhatsApp