Chartered Accountant

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Babita Agarwal

Babita Agarwal (Querist)
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29 May 2008 Whether a Chartered Accountant holding full time COP can be director in a company?

R.V.RAO

R.V.RAO (Expert)
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29 May 2008

sir,
i reproduce icai regulations from icai website below relating to c.a being appointed as director.
Director of a Company:
A member in practice shall be permitted to be a Director (Director Simplicitor), Promoter/Promoter
Director, Subscriber to the Memorandum and Articles of Association of any company including a Board
Managed Company.
(a) Director Simplicitor:
(i) the expression 'Director Simplicitor1 shall be used for an ordinary/simple Director, who fulfills
the following conditions :
(a) he is required to attend the Board meetings only.
(b) He will not be paid any remuneration except the sitting fees for attending the Board
meetings; and
(c) He will be devoting his time for the company only to attend Board meetings and not for any
other purpose.
(ii) A member in practice is permitted generally to be a Director Simplicitor in any Company
including a Board-Managed Company and as such he is not required to obtain any specific
permission of the Council in this behalf irrespective of whether he and/or his relatives hold
substantial interest in that Company.
(b) Promoter/Promoter-Director:
There is no bar for a member to be a Promoter/Signatory to the Memorandum and Articles of
Association of any Company. There is also no bar for such a promoter/signatory to be a Director
Simplicitor of that Company irrespective of whether the objects of the Company include areas which
fall within the scope of the profession of Chartered Accountancy.
Therefore members are not required to obtain specific permission of the Council in such cases.
Appendix No. 9 to the Chartered Accountants Regulations, 1988, particularly item no. 3 of part B
together with the definition of 'relative' and 'substantial interest' may be referred to.
Permission for rendering of services to a company as a professional accountant in addition to being
Director/Managing Director etc. requires special specific permission of the Executive Committee.
source:WWW.ICAI.ORG
R.V.RAO