How to establish the remuneration of the administrators in the statutes in order not to have problems with the Treasury or the Registry?
According to the law, the position of director is free of charge unless the bylaws establish otherwise, in which case they must determine the remuneration system. This, without prejudice that later it is the Meeting the one that, based on this system, determines every year the exact amount of the remuneration, which, in addition, can be a deductible expense for the company.
The bylaws must include all the remuneration items (a fixed allowance, a variable allowance according to objectives, pension plans, company car, insurance, etc.). To avoid having to modify the bylaws every time the director receives a new item, it is advisable to include a broad list, to indicate that the director may receive any of the items listed (so as not to be obliged to always receive the same items) and, in addition, to avoid using the conjunction “or” to separate the items, as some registries consider that the “or” generates confusion because it can be interpreted that the options are alternatives.
Regardless of the above, the Shareholders’ Meeting must approve the maximum annual remuneration to be received by the members of the Board of Directors. It is possible to keep said remuneration in force for several fiscal years by adding a tagline at the end of the agreement stating that it will remain in force until the Meeting agrees to modify it.
Possible situations:
- If the director already receives remuneration and there is no record of the approval of the Meeting of the amount received -even though the company has deducted it-, the Tax Authorities could discuss such deduction.
- If there are several administrators and the Meeting does not distribute the remuneration among them, the administration body will be able to distribute it, remunerating each member according to his functions and responsibilities and justifying the amount received.
- When there is a managing director, a contract must be signed with the company, which must be approved by 2/3 of the directors, and the interested party must abstain from deliberation and voting.
Our advisors will study your case and will inform you on the best way to establish the remuneration of the position of corporate director in your company and if you can deduct this expense.