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?

Q: Answer-Mr. X is currently a director in 10 Public Companies. He is offered a directorship in Y Ltd., which...

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.

A No, because Y Ltd. is a private company and private companies are excluded from the 10-public-company limit.

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.

C No, provided he resigns from one of his other board positions within 30 days.

D Yes, because the total limit for all types of companies is 10.

E No, if the shareholders of Y Ltd. pass a special resolution.

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