📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    Mr. X is currently a director in 10 Public Companies. He

    is offered a directorship in Y Ltd., which is a Private Company but a subsidiary of a Public Company. Does this appointment violate Section 165?
    A No, because Y Ltd. is a private company and private companies are excluded from the 10-public-company limit. Correct Answer Incorrect Answer
    B Yes, because for the purpose of calculating the limit of 10 public companies, directorship in a private company which is a subsidiary of a public company shall be included. Correct Answer Incorrect Answer
    C No, provided he resigns from one of his other board positions within 30 days. Correct Answer Incorrect Answer
    D Yes, because the total limit for all types of companies is 10. Correct Answer Incorrect Answer
    E No, if the shareholders of Y Ltd. pass a special resolution. Correct Answer Incorrect Answer

    Solution

    As per Section 165 of the Companies Act 2013, (1)   No person, after the commencement of this Act, shall hold office as a  director , including any alternate directorship, in more than twenty companies at the same time : Provided  that the maximum number of public companies in which a person can be appointed as a director shall not exceed ten . Explanation I. — For reckoning the limit of public companies in which a person can be appointed as director, directorship in private companies that are either holding or subsidiary company of a public company shall be included.

    Practice Next
    More Commercial Laws Questions
    ask-question