eligibility of N.R.I director
This query is : Resolved
27 January 2011
Dear Sir/Madam,
can an N.R.I can become a M.D/Whole Time Director in a company. I know that there is no restriction on N.R.I to become a director but not so clear on M.D/ W.T.D. Section 253 of the Companies Act 1956 is silent about the same.
Please revert ASAP.
Regards
CA Hardik Patwa
can an N.R.I can become a M.D/Whole Time Director in a company. I know that there is no restriction on N.R.I to become a director but not so clear on M.D/ W.T.D. Section 253 of the Companies Act 1956 is silent about the same.
Please revert ASAP.
Regards
CA Hardik Patwa
27 January 2011
There is no restriction in NRI becoming a MD/WTD as per Section 269 of the Companies Act. However as per Part I Schedule XIII, if he is not resident in India, CG approval is required.
28 January 2011
Thanks jayshree for ur reply.
CG approval is required only in case of appointment of N.R.I as M.D/W.T.D in Public limited company or Private limited company which is a subsidiary of Public company having paid up capital of more than Rs.5 cr. But is there any compulsion to appoint M.D/ W.T.D in Private limited company? If there is no compulsion then there is no need to appoint the M.D and no need to take approval. Only 2 directors can be appointed.
Waiting for ur reply.
Regards
CA Hardik Patwa
CG approval is required only in case of appointment of N.R.I as M.D/W.T.D in Public limited company or Private limited company which is a subsidiary of Public company having paid up capital of more than Rs.5 cr. But is there any compulsion to appoint M.D/ W.T.D in Private limited company? If there is no compulsion then there is no need to appoint the M.D and no need to take approval. Only 2 directors can be appointed.
Waiting for ur reply.
Regards
CA Hardik Patwa
28 January 2011
Agree with Hardik that a private company need not appoint MD/WTD. Only public companies / subsidiaries of public companies having a paid up capital of more than Rs.5 cr. is required to appoint MD/WTD as per Section 269 of the Companies Act, 1956. Here again CG approval is required only if he is not resident in India.
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