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Companies Act, 1973 (Act No. 61 of 1973)

Chapter VIII: Directors

Restrictions on Directors, their Powers and Certain Acts

225. Prohibition of tax free payments to directors

 

 

1) No company shall pay to any of its directors (whether in his capacity as a director or otherwise) any remuneration free of any taxation in respect of his income, or otherwise calculated by reference to or varying with the amount of such taxation, or with the rate of taxation on incomes, except under a contract which was in force on the thirteenth day of June, 1949, and which provides expressly, and not merely by reference to the articles of the company, for payment of remuneration as aforesaid.

 

2) Any provision contained in the articles of a company, or in any contract other than such a contract as aforesaid, or in any resolution of a company or of its directors, providing for the payment to a director by way of remuneration of any amount to be determined in a manner prohibited by subsection (1), shall be construed as if it provided for the payment of that amount without reference to such manner of determination thereof.