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Jayanta Bandyopadhyay   06 June 2024

Indian nationals becoming director abroad

Indian nationals holding directorship of unlisted public cos in India also run 100% subsidiary in Mauritis Co,  who in turn also owns 100% stake in another c in Mauritius.  Can Indian promoters hold directorship in all 3 cos and execute agreement among themselves.  Strangely they are signing as directors of these common controlled cos.

Is it legally tenable?



Learning

 3 Replies

T. Kalaiselvan, Advocate (Advocate)     06 June 2024

A person appointed as a director will perform all the duties and functions of a director as per the provisions of the Companies Act, 2013 (“Act”). 

The Act lays down the provisions regarding the appointment, rights and duties of the directors. Any person appointed as a director of a company has the freedom to be a director in another company. However, Section 165 of the Act states the provisions relating to the number of directorships a person can hold at a given time.

Section 165(1) of the Act states that a person can hold the office of director simultaneously in 20 companies. The number of 20 companies includes the office of alternate directorship. A person cannot be a director in more than 20 companies at a given time. However, the maximum number of public companies in which a person can be a director simultaneously is 10. 

Dr. J C Vashista (Advocate )     07 June 2024

Prima facie the main company is registered and functioning in India whereas Mauritius is subsidiary of Indian company, is it so ? 

Jayanta Bandyopadhyay   07 June 2024

Sir, Mauritius based company is wos of Indian parent Co. That Mauritius Co also owns one wos at Mauritius and having 70% stake in another Co.

Directors of India parent are also on the board of wos and step down subsidiaries.  They are executing agreement both in the capacity of Indian parent as well as wos. I am confused whether one takes 2 caps at the same time vis a vis FEMA, CO ACT ETC.

KINDLY GUIDE.


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