General Circular no. 25/2014, Dated: 26th June, 2014

Subject: Clarification on applicability of requirement for resident director.

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.

No: 1/ 22/13 -CL-V

Yours faithfully,

 (KMS Narayanan)

Asstt. Director (Policy)


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Category : Company Law (3490)
Type : Circulars (7563) Notifications/Circulars (30685)

2 responses to “Clarification on applicability of requirement for resident director”

  1. Himanshu says:

    I had a doubt in this Circular. Please try and clarify me.
    This Circular says that any company incorporated after 30th September 2014 shall have a resident director from the first day itself.
    Suppose a company is incorporated in October 2014. They need to comply with atleast one resident director. But as per this circular the first calendar year for counting 182 days in 2014 itself and according to act he should stay in India for 182 days in previous calendar year i.e. 2013 which in not possible since Section 149 came into effect from April 2014 itself.
    Now how do we comply the requirement of a Resident Director for a company incorporated in October 2014?

  2. Thamizhvanan says:

    For existing companies the requirement of appointing Resident director shall be from 1.1.2015 of a person who stayed in India for a period of atleast 136 days in the period Apriil 2014 to December 2014. This is my view. Seek opinion of professionals

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