Appointment of NRI as Managing Director

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The appointment of a Non-Resident Indian (NRI) as a Managing Director in an Indian company is permissible under Indian company law, which generally allows foreign nationals to hold directorships. However, specific provisions, particularly within Schedule V, stipulate that a person must be a resident of India for at least 12 months prior to appointment to be eligible for the role of Managing Director or Whole-Time Director. The necessity of filing MR-2 in such appointments also requires clarification based on specific circumstances.

MANISHA MAKHIJA

MANISHA MAKHIJA (Querist)

16 March 2023 Please provide whether NRI be appointed as Managing Director of the Company without Central Government approval.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

16 March 2023 Yes, The company law in India does not bar foreign nationals from becoming directors in Indian companies. A foreigner or a non-resident Indian can become an executive or a non-executive/independent director of Indian companies whether public or private.

MANISHA MAKHIJA

MANISHA MAKHIJA (Querist)

16 March 2023 Thank You Sir
But filing of MR-2 is mandatory?
Company has appointed Managing Director without filing MR-2

Jatin Bajaj

Jatin Bajaj (Expert)

20 March 2023 In General Paralance, there is no bar in appointment of non resident person as the Director but pursuant to the provisions mentioned in schedule v , it is stipulated that no person shall be eligible to be appointed as the managing director or the whole time director unless he is resident of India.
For Purpose of schedule 5- person resident in india means a person who has been residing in india for a continuous period of 12 (twelve) months immediately preceding the date of his appointment.

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