Clarification on applicability of requirement for resident director. (General Circular No. 25/2O14)

General Circular No. 25/2O14

 No.1/22/13-CL-V

Government of India

Ministry of Corporate Affairs 

"A" Wing, 5th Floor, Shastri Bhawan

Dr. R.P. Road, New Delhi 110001

Date 26th June, 2O14

To

All Regional Directors, 

All Registrar of Companies,

All Stakeholders

Subject: Clarification on applicability of requirement for resident director.

Sir,

Section 149(3) of the Companies Act, 2013 (Act) requires every company to have at least one director who has stayed in India for a total period oi no1 less than 182 days in the previous calendar year. Government has received requests from stakeholders for clarification with regard to applicability of these provisions in the current calendar./financial year.

2. The matter has been examined. It is clarified that the ,residency requirement' would be reckoned from the date of commencement of section 149 of the Act i.e. 1$ April, 2014, Time first ,previous calendar year, for compliance with these provisions would, therefore, be Calendar year 2014. The period to be taken into account for compliance with these provisions will be the remaining period of calendar year 2014 li.e. lst April to 31"1 December).

Therefore, on a proportionate basis, the number of davs for which the

director(s) would need to be resident in India. during Calendar year.2014, shall exceed 136 days.

3. Regarding newly incorporated companies it is clarified that companies incorporated between 1.4.2014 to 30.9.2014 should have a resident director either at the incorporation stage itself or within six months of their incorporation. Companies incorporated after 30.9.2014 need to have the resident director from the date of incorporation itself.

This issues with the approval of the competent authority.

Yours faithfully.

(KMS Narayanan)

Assistant Director(Policy)

Copy to:-

1. e-Governance Section and web contents Officer to place this

circular on the Ministry website.

2. Guard File