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Can a practising CA become a director in company?

Deepika (head) (52 Points)

03 July 2010

Can a practising CA can become a Director in a company...if yes can he accept salary or director's remuneration from that company?

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Venkateswara Rao Sapare (Accountant) (1500 Points)
Replied 03 July 2010

"Can a practising CA can become a Director in a company?"

No.

As long as one is in Practice, He can not opt for any employment i.e. he can not become an employee ( consider the vivid point that employer-employee relationship).

Interested to become a Director, he is bound to quit his practice and update the same to the ICAI.

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CA Amit Kumar Shrivastava (CHARTERED ACCOUNTANT) (104 Points)
Replied 03 July 2010

Originally posted by : Deepika
	Hi Can a practising CA can become a Director in a company...if yes can he accept salary or director's remuneration from that company?

AS PER CLAUSE-11 OF SCHEDULE-1 OF CA ACT-1956 , A PRCTISING CA CAN BE DIRECTOR OF A COMPANY BUT AFTER TAKING SPECIAL PERMISSION FROM THE ICAI.

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Amir (Learner) (4016 Points)
Replied 03 July 2010

Dear Mam, Agree with Friend Amit - Pls refer this link - https://www.icai.org/resource_file/7536m_engage.pdf

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CA Ayush Agarwal (Kolkata-Pune-Mumbai) (27186 Points)
Replied 03 July 2010

Thanks Amit & Amir For These Info & Link........

Deepika (head) (52 Points)
Replied 03 July 2010

thanks

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CA LOVELY ARORA (C.A. B.Com (H) Graduate) (2151 Points)
Replied 03 July 2010

he may be a non-executive director in a company........ attend board meetings only, receiving sitting fees (not director remuneration), etc.......

Venkateswara Rao Sapare (Accountant) (1500 Points)
Replied 03 July 2010

Among us, it is surprising to miss the point in the question of Ms. Deepika that “ if yes can he ( A Chartered Accounted who becomes a Director in a Company) accept salary or Director’s remuneration from that company?

My version was as follows:

“No.

As long as one is in Practice, He can not opt for any employment i.e. he can not become an employee ( consider the vivid point that employer-employee relationship).

Interested to become a Director, he is bound to quit his practice and update the same to the ICAI”

It seems clear that my version did not strike the right chord of the criteria.

Ms.Deepika is a bit particular about the receipt of remuneration by the Director.

My answer was “No”.

If a practicing CA wishes to accept salary / remuneration by becoming a director of a company, he can not do it. That is what I meant. If at all, he wishes to play a role he can be just “Director Simplicitor”. Please, let us go through following lines.

(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.

Now, after going through above lines, what do we infer.

Nitin Grover (CS) (1228 Points)
Replied 04 July 2010

Dear Deepika

Yes PCA can be a Director in a company but dont appoint him/her as an Executive Director/ WTD in a Company.

Ya he can withdraw a remuneration also.

but he can not be a director in that company in which he is an auditor.

Regards

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Deepika (head) (52 Points)
Replied 30 July 2010

ok thanks everyone....CA holding COP can become director simplicitor in a company...Does he need to inform abt his directorship to ICAI?

Venkateswara Rao Sapare (Accountant) (1500 Points)
Replied 30 July 2010

Answer to the question "Does he need to inform abt his directorship to ICAI?" of Ms.Deepika, is as follows:

Yes, he needs to inform the Council, within a period of one month, from the day he ceases to practice.

It is good that you realized the point that "CA holding COP can become director simplicitor in a company" in my response on July 3rd, 2010.

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Deepika (head) (52 Points)
Replied 31 July 2010

hi..thanks...but that CA hasnt stopped practicing...he has just become director simplicitor in a company while continuing his practice ...even then he needs to inform or general permission is there??

Venkateswara Rao Sapare (Accountant) (1500 Points)
Replied 31 July 2010

COP, in question, is expected to observe the norms of the Council of ICAI, else his membership may be in jeopardy., if not immediately as long as it does not come to the notice of the Council.

Ramesh Agrawal (LL.B , CA) (CA) (832 Points)
Replied 16 May 2012

CA in practice if become just director simplicitor then whether he need to inform ICAI?

Regards

CA Ramesh

Gaurav (Associate) (21 Points)
Replied 01 September 2015

Quoting from Regulation 190A

"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. "

Also, if the member in practice is engaging in any business or occupation he/she is required to inform the council within 30 days of joining such business or occupation:

"A member in practice is required to seek permission of the Council under Regulation 190A for engagement in any business or occupation other than the profession of accountancy. The member is required to submit an application in the prescribed Form. The permissible categories of engagements approved by the Council under Regulation 190(A), are available in Appendix No. 9 to the Chartered Accountants Regulations, 1988. "

Conclusion: Member in Practice does not require permission if he becomes a Director Simplicitor of a company. Or even a signatory to the MOA as a Director (Simplicitor) - as long as he does not receive a remuneration (sitting fee is allowed for attending board meetings)