17 December 2013
“A” is Managing director in ABC Pvt Ltd which is 100% subsidiary of foreign company. The foreign company also holds 40% shares in another company say WXY Pvt. Ltd. There is no transaction or any direct link between ABC Pvt Ltd and WXY Pvt. Ltd.. My query is can “A” be appointed as an Director in WXY Pvt. Ltd. is any constraint or what is it impact of it on ABC Pvt. Ltd. And what are the compliances required for it.
Yes he can be appointed as a director..there is absolutely no problem...
the only point is, he cannot be a whole time director in 2 companies...so incase you want to appoint him, you can appoint him as a non executive director
The provision of section 269 relating to appointment of managing director is not applicable on private company, so you are free to appoint such person in other company, no issue.
Pass a Board resolution and appoint such person as director in other company.
Thank you so much. I f resign as MD from first company than there shall not be any issue. And due to common director and common parent company shareholding in both, ABC & WXY will become the related company??
CAclubindia
