Can a Company Become A Director of Another Company ????
Plz Discuss in Detail and not only Yes / No
3 Replies
ravindranth
(company secretary)
(114 Points)
Replied 11 November 2010
NO
the basic definition of director as per the companies act, 1956 is the Director should be an individual. in some foreign countries companies are allowed as directors. but in india it is not accepted.
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 11 November 2010
Hi,
As per section 253 of Companies Act, 1956 only individual can be appointed as a director of the company.
For more learning:
The reason why only an individual should be a director is pointed out by Supreme Court in
Oriental Metal pressing Works private limited Vs. Bhasker Kashinath Thakoor.
According to Supreme Court the office of a director is to some extent an office of trust and there should be somebody available on whom responsibility could be fixed. Fixing such responsibility might be difficult if the director is a corporation or an association or firm.
Hope this would be of some help.
Best Regards
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 11 November 2010
It is specifically provided under section 253 that No body corporate, association or firm shall be appointed director of a company, and only an individual shall be so appointed.
Therefore, no matter to discuss, as specifically provided in the Act itself.
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