Mr. A is a Director in both Company LMN (Pub. Co.) and XYZ (Pvt.co.). In an agreement entered into between XYZ and LMN, Mr. A has signed on behalf of both the companies in the capacity of a Director..
Further Mr. A has 8% shareholding in XYZ Pvt. Ltd.
So apart from Disclosure U/Sec. 299, is there any other compliance required?
Is it legal and valid under the Contract Act as well as companies act that a contract be signed by a single individual on behalf more than one company as a Director or in any other capacity??
19 March 2008
There is nothing in the contract Act or any other Act that prohibits a person from signing as a Director in two companies except for the disclosures.
If the Director holds more than 20 % then Sec 2(22)(e) of Income Tax Act 1961 gets attracted.
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