Can a Director without salary be considered an employee
Can a Director of a company be considered as an Employee of the company, wherein he's appointed as a director for 5 years, without any salary benefits.
here the director is one and only son of the owner of the group of companies.
Asked 1 year ago in Business Law from Hyderabad, Telangana
1. Director is the face and lawful representative and corporate veil .
So it's not employee in strict sense of the term. If you divulge the background reason of the query then further advice can be given.
Generally as per Companies Act mere Director is not employee of the Company but if he is managing director or executive director or getting salary for rendering of some services then he is employee of the Company.
1. No.Directors are not treated as employees of a Company,
2. They do not take salaries but remunerations from the Company.
As per the company's Act a director can be appointed as whole time director/ Employee of the company, he will get a remuneration but cannot be considered as Salary, and cant claim deduction on salary in the name of the PF\ ESi, because as per Income tax Act there is no employer and employee relation.
He can claim the remuneration for all those back years also even now.
In terms of the Companies Act, a director is an agent, trustee and employee. A director is an employee if he holds a salaried employment and thus enjoys all the benefits which are given to a regular employee. A Managing Director is a director who holds such position. Thus, all the executive directors (including managing director) are employees of the company too and at par with other employees.