Cos Act 2013, Clarification on applicability of requirement for resident director section 149(3)

No. 1/22/13-CL-V
Government of India
Ministry of Corporate Affairs

5th Floor, A Wing,   Shastri Bhavan,
Dr R.P. Road, New Delhi
Dated: 26 ^th June, 2014

To
All Regional Directors,
All Registrars 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 of not 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. 1st April, 2014. The 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 (i.e. 1st April to 31st December). Therefore, on a proportionate basis, the number of days   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)

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