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Who can be a Director of a Company in India? Brief Notes

The appointment of a Director in a company in India is governed by the Companies Act, 2013 and rules made thereunder and is subject to the provisions of the articles of association of the company and in case of a listed company, also subject to the SEBI regulations.

There are mainly two types of Directors who get appointed in a company:
1) Executive Directors (Managing Director, Whole-time Director, etc);
2) Non-Executive Directors (Independent Director, Nominee Director, etc).

Age Limit for Directorship

Age limit for Non-executive Directors

The Companies Act has not prescribed any age limit for a person to become a Non-executive Director of a company.

Minor cannot become a director

A minor, who has not attended the age of majority, cannot become a director in a company because a minor is not competent enough in the eyes of the law to enter into a contract. The relationship between a director and a company is of contractual in nature.

Age limit for MD, WTD, Manager

Refer Section 196(3) and Part I of Schedule V of the Companies Act.

• A person shall not be eligible for appointment as
• a managing director or whole-time director or a manager
• if he has not completed the age of 21 years or
• if he has attained the age of 70 years.

• A company may appoint a person as
• a managing director or whole-time director or a manager
• who has attained the age of 70 years 
• by taking members/shareholders approval by a special resolution.

Age limit for Independent Director

• In case of a listed entity,
• the age of an Independent Director to be appointed shall not be less than 21 years of age,
• as per Regulation 16(1)(b)(vii) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.


Resident of India

• As provided in Part I of Schedule V of the Companies Act,
• a person shall be eligible for appointment as
• a managing director or whole-time director or a manager,
• if he is a resident of India.

Here, a resident in India means a person who has been staying in India for a continuous period of not less than 12 months immediately preceding the date of his appointment.


Nationality of a Director

No nationality specific restrictions is given under the Companies Act for appointment of directors.

However, the articles of association of a company may provide for any such restrictions. Such cases are very rare.


Can a company be a director of another company?

As per Section 149(1) of the Companies Act, only individuals shall be appointed as Directors in the Board of Directors of a company.

Hence, no company, body corporate, body of association or firm can be appointed director of another company.


Disqualified person can not be a Director

The criteria for disqualification of a director for appointment or re-appointment is given under Section 164 of the Companies Act.

A disqualified person is not eligible for appointment as a director of a company.


How to find the details of Directors of a company in India?

The Directors' details of all the companies registered in India, including foreign companies having a place of business in India and registered under the law, is made available at the Ministry of Corporate Affairs (MCA) official website.

Comments

  1. In my view it's better to be a senior official and draw good amount of money as much as possible as per better work performance rather than being a Director. There are so many legal liabilities upon a Director of a Company. Somebody else may do a mistake and the Director may get punished by law for it. Of course, he will be given chance to prove his innocence in the matter but that may not be quite sufficient to avoid penalisation.

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