Meaning of Resident Director
- Section 149(3) of the Companies Act, 2013 provides that every Company shall have at least one director who has stayed in India for a total period of at least 182 days during the financial year.
- In the case of a newly incorporated company, the requirement of Resident Director shall apply proportionately at the end of the financial year in which it is incorporated.
- Thus, a Resident Director is required in order to comply with the requirement of the Companies Act, 2013.
Duties and Responsibilities of Resident Director in India
- The resident Director will act as any other Director of the company.
- He will be fully responsible as any other Director of the Company,
- Resident Director may not be involved in operational control of the company.
- Resident Director is usually appointed to fulfill the statutory requirements.
- Resident Director may participate in Board Meetings of the Company, wherever required.
- The Resident Director like any other Director is required to attend at least 1 Board Meeting in a year.
Relaxation for not having a Resident Director
In view of the COVID-19 outbreak, the Ministry of Corporate Affairs (‘MCA’) vide General Circular No. 11/2020, dated 24th March 2020 and General Circular No. 36/2020 dated 20th October 2020, had relaxed the residency requirement of 182 days in a year and that the non-compliance of minimum residency in India for a period of at least 182 days in a year, by at least one director in every company, under section 149 of the Companies Act, 2013 was not treated as non-compliance for the financial year 2019-20 and 2020-2021 respectively.
However, no relaxation has been given by Ministry for not having a resident director for the financial year 2021-22.
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The article has been contributed by
Manager – Corporate Secretarial and Compliance
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