Resident Director – Clarification with regard to applicability of requirement by MCA

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Resident Director – Clarification with regard to applicability of requirement by MCA

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ection 149(3) of the Companies Act, 2013 (Act) requires every company to have at least one resident director i.e. a director who has stayed in India for a total period of not less than 182 days in the previous calendar year.

There were few concerns raised by the corporate in India for sudden applicability of provision with regard to resident director. Also there was a debatable point regarding calculation of days of resident director for the year 2014 (as the calculation is based on calendar year basis). MCA has issued a clarification for the same.

It has been clarified that,
● The provision is applicable with effect from 1st April 2014.
● The question arises regarding applicability of section 149(3) for the first calendar year i.e. Calendar Year 2014.
● The period to be taken into account for compliance with these provisions will be the remaining period of calendar year 2014 i.e. 1st April to 31st December).
● Hence, for the year 2014, on a proportionate basis, during calendar year 2014, the director would be required to be resident in India for more than 136 days.
● Regarding newly incorporated companies it is clarified that companies incorporated between 1st April 2014 to 30th September 2014 should have a resident director either at the incorporation stage itself or within six months of their incorporation. Companies incorporated after 30th September 2014 need to have the resident director from the date of incorporation itself.


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